Financial markets in Asia are moving on contrasting signals today, with Indonesia hit by political upheaval after the dismissal of its finance minister, while Southeast Asia’s biofuel sector projects export growth to Europe and Singapore secures major funding for green infrastructure.
Indonesia’s markets rattled
Indonesia faced immediate financial pressure after President Prabowo Subianto dismissed Finance Minister Sri Mulyani Indrawati, long respected for her fiscal discipline. The Jakarta Composite Index fell 1.8% in early trading, while the rupiah weakened by around 1%. Investors reacted sharply to fears that prudent budget management could give way to more populist spending.
Her replacement, Purbaya Yudhi Sadewa, has pledged to pursue the president’s 8% GDP growth target, but markets remain sceptical given his limited fiscal management experience. Analysts caution that Indonesia’s credibility with international lenders could be at risk if reforms stall.
Southeast Asia biofuel exports rise
In Singapore, energy executives confirmed that Southeast Asia is on track to become a net exporter of biofuels by 2030, with production capacity expected to reach 4 million tonnes annually. Petronas is partnering with Italy’s Eni and Japan’s Euglena to construct a major biorefinery in Johor, Malaysia, scheduled to begin operations in 2028.
The region’s surplus is expected to be channelled to Europe, which is tightening renewable energy targets. This development positions Southeast Asia as a key player in the global sustainable fuel market.
Singapore mobilises green funding
The Monetary Authority of Singapore announced that it has secured $510 million in commitments for green infrastructure projects across Asia. The funds, managed under the Financing Asia’s Transition Partnership, will support renewable energy, sustainable transport and storage solutions.
The initiative aims to attract private capital into projects that might otherwise struggle to secure backing, underscoring Singapore’s growing role as a regional hub for sustainable finance.
Implications for investors
The contrasting developments reflect Asia’s dual narrative: political risk unsettling markets in Indonesia while the wider region benefits from energy transition opportunities. For investors, Indonesia highlights the dangers of sudden policy shifts, whereas Singapore and Southeast Asia’s biofuel growth underline the long-term structural trend toward sustainability.
Newshub Editorial, 10 September 2025
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