Almost three weeks after taking office, President Megawati Sukarnoputri announced her new cabinet today.

She said the 31-member body will include retired army general Susilo Bambang Yudhoyono as the senior security minister, seen as the most powerful cabinet position. He lost the same post in Wahid's cabinet in June.

Megawati named ambassador to Washington and economist Dorojatun Kuncoro-Jakti as the new coordinating minister for the economy, replacing Abdurrahman Wahid's Burhanuddin Abdullah.

The new cabinet has three coordinating ministers, 17 ministers, 10 state ministers without ministries and two senior officials holding ministerial rank.

The government's main duty will be to pull Indonesia out of its prolonged economic slump and maintain the unity of the sprawling archipelago in the face of separatist rebellions, and escalating ethnic and religious violence.

"National unity will be the first priority of my Cabinet," Megawati said in a nationally televised speech. She said the lineup was designed to improve relations with Indonesia's creditors, which are backing a multi-billion dollar economic rescue program led by the International Monetary Fund.

Megawati identified the wildly fluctuating exchange rate of the national currency, and the difficulties of restructuring banking sector as Indonesia's main economic problems.

Just hours before the announcement, the rupiah rose sharply to a 10-month high as financial sector speculated that market-friendly ministers would be appointed to the crucially important economic portfolios. The rupiah hit 9,050 against the US dollar. This was its highest level since the outbreak of the political crisis that led to former President Abdurrahman Wahid's ouster and Megawati's inauguration on July 23.

Among the other important appointments, was the naming of Matori Abdul Jalil, a civilian, as defence minister. Matori, had been chairman of Wahid's party but deserted the former leader to support Megawati in the final days of his administration.

Although her Indonesian Democratic Party of Struggle is the nation's largest party and holds one-third of seats in Parliament, it still lacks a governing majority. Because of this, Megawati had to rely on the additional backing of other parties to win office.