JAKARTA Indonesia's outgoing President Joko Widodo will appoint Thomas Djiwandono, the nephew of president-elect Prabowo Subianto and his adviser for fiscal issues, as a deputy finance minister later on Thursday, a senior politician said.

Sufmi Dasco Ahmad, a senior member of Prabowo's Gerindra political party confirmed Reuters' earlier report of the planned appointment, adding Djiwandono will serve in the same role after Prabowo's term officially starts in October.

Djiwandono, the presidential palace and the finance ministry did not respond to request for comment.

The appointment was intended "to smooth the transition of government from the administration of Mr Jokowi to Mr. Prabowo," Dasco told Reuters, referring to the current president by his popular nickname.

The rupiah IDR= fell about 0.4% against the US dollar during early Thursday trading, the biggest drop among emerging Asian currencies.

Djiwandono will work with Widodo's current, well-respected finance minister, Sri Mulyani Indrawati, who has won plaudits for prudent fiscal policy, including her finance management during the Covid-19 pandemic.

But financial markets have been paying close attention to Prabowo's finance minister pick and fiscal policy after ratings agencies warned fiscal risks could rise due to his costly campaign promises, which include a flagship programme to provide free school meals.

Concerns of rising debt during Prabowo's upcoming administration had previously added to pressure on the rupiah and Indonesian bond prices.

US-educated Djiwandono has been the main spokesperson for Prabowo's fiscal stance, often reiterating the incoming president's commitment to abiding by fiscal rules and keeping the 2025 budget deficit under the legal limit of 3% of gross domestic product.

Djiwandono had worked with in a securities firm in Hong Kong and for the Arsari Group, a Indonesian conglomerate led Prabowo's brother Hashim Djojohadikusumo, according to his profile at the official website of the Gerindra party, where he also serves as the party's chief treasurer.

  - Reuters