By Maikel Jefriando and Agustinus Beo Da Costa
JAKARTA (Reuters) - Indonesian Finance Minister Sri Mulyani Indrawati said on Tuesday she had been asked by President Joko Widodo to stay in her post in his new cabinet, and the rupiah strengthened on expectations fiscal discipline would be maintained.
Since Monday, Widodo has tapped more than a dozen candidates for ministerial posts in his second five-year term, including his presidential election rival Prabowo Subianto. Local media have said Prabowo could be the new defense minister.
The candidates - all wearing white shirts - visited the presidential palace to be interviewed by Widodo, with most declining to confirm the positions offered ahead of an official announcement expected on Wednesday.
After meeting Widodo, Indrawati said she had agreed to stay on as finance minister and to ensure policies supported the president's priorities such as improving human resources, creating jobs and executing government budgets well.
"Indonesia I think is facing a very dynamic and uncertain global economy and an economic slowdown that is pressuring the whole world," Indrawati said.
"Therefore, a continued policy is needed in order to be able to guard our economy from the challenge of this global slowdown," she said, noting she also discussed ways to narrow Indonesia's current account and trade deficits.
Indrawati, a former managing director of the World Bank, has been finance minister in Southeast Asia's largest economy since 2016, spearheading tax reform efforts, seeking to capitalize on a tax amnesty program in 2016-2017. She is now one of the longest serving finance ministers in Indonesia, having also held the post in the previous administration of President Susilo Bambang Yudhoyono.
The rupiah extended gains after her comments, strengthening by as much as 0.6% to 13,990 to the dollar, to trade at the highest in more than a month.
"Sri Mulyani is seen as a key architect behind the fiscal discipline in recent years and many wish for her continued leadership in driving deeper fiscal reforms," Bank of America wrote in a note.
Another important economic appointment was Luhut Pandjaitan, who said the president had asked him to retain his previous role overseeing maritime and mineral resources, and expanded it to include investment.
Pandjaitan, who spearheaded an acceleration of a nickel ore export ban this year, said Widodo had asked him to continue to expand mineral processing, improve investment in petrochemicals and cut "inefficiencies" in the state energy company Pertamina.
THREE PARTY HEADS
The number of technocrats like Indrawati named to the cabinet is being closely watched as they are seen more likely to back Widodo's plans for boosting growth and investment than party-affiliated candidates.
Basuki Hadimuljono, credited with driving infrastructure projects as public works minister in Widodo's first term, and Siti Nurbaya Bakar, environment minister, will remain in the cabinet, they said after meeting the president.
Besides Prabowo, a former general who heads the Gerindra party, two other party heads have been tapped to become ministers: Airlangga Hartarto, chairman of the Golkar party, and Suharso Monoarfa, who chairs the United Development Party. Hartarto has been linked in media to the post of coordinating minister for economic affairs.
The coalition led by Widodo's PDI-P party, which includes Golkar and the United Development Party, has about 60 percent of the seats in parliament. Gerindra has 14 percent.
Although the appointments underpin Widodo's attempts to secure wide parliamentary support as he seeks to push through his agenda, they will add to concerns among activists about a muted opposition and the dilution of Indonesia's democracy.
Other ministerial candidates asked to join the cabinet include Nadiem Makarim, chief executive of tech startup Gojek and media tycoon Erick Thohir, a former chairman of Italian soccer club Inter Milan.
(Additional reporting by Jessica Damiana, Fransiska Nangoy and Tabita Diela; Writing by Gayatri Suroyo; Editing by Ed Davies and Raju Gopalakrishnan)