JAKARTA (REUTERS) - Indonesia named respected investment chief Muhammad Chatib Basri as finance minister, who takes on the role as South-east Asia's biggest economy grapples with slowing economic growth and how to bring down the cost of massive fuel subsidies.

Mr Basri, 47, will be inaugurated on Tuesday to become Indonesia's third finance minister in as many years.

"Today, I have decided that the new finance minister to replace Agus Martowardojo will be Muhammad Chatib Basri," President Susilo Bambang Yudhoyono said in a brief statement.

Mr Basri faces investor concerns over slowing economic growth, sizable current and capital deficits and the government's repeated failure to deal with high-cost fuel subsidies, which are taking away money from desperately needed instructure projects to encourage longer term investment.

The previous minister, Mr Agus Martowardojo, was removed from the position in April and will take over as head of the central bank later this month. Chief economics minister Hatta Rajasa has been acting finance minister in the interim.

Mr Basri became Indonesia's investment chief in 2011. Earlier, he served as special adviser to finance minister Sri Mulyani Indrawati, who took a top World Bank post.

The new finance minister has a doctorate in economics from Australian National University.

"Basri's appointment as the new minister shows the government's seriousness by assigning a trained economist into the job," said Mr Freddy Hendradjaja, chief investment officer at Lippo Securities.

The main Jakarta share index rose following the announcement and was up 1.7 per cent for the day.