Due to his closeness to the revolutionary leader Sutan Sjahrir, he was appointed finance minister in the Republican government during the Indonesian National Revolution (1945–1949).

One of the party's leaders and its most prominent economic policymaker, he maintained a conservative approach to government budgets and established a foreign exchange certificate system.

He then became the first governor of Bank Indonesia, where his general accommodative approach to foreign capital and opposition to nationalization caused tensions with the Sukarno government and economists such as Sumitro Djojohadikusumo.

The article came as a response to revolutionary armed forces commander Sudirman's speech which espoused militancy and downplayed the lack of equipment of the Indonesian military.

Once he returned, he published a booklet Politik dan Revolusi Kita (Our Politics and Revolution) in mid-1948 which attempted to clarify the unusual coalition between Masyumi and the Indonesian Communist Party (PKI).

[24][9][25] After being informed of Yogyakarta's fall by Colonel Hidayat Martaatmadja [id], Sjafruddin was initially unable to believe that the Indonesian government would collapse so quickly and that both President Sukarno and Hatta had been captured.

[27] In order to evade the Dutch attacking Bukittinggi, he retreated further inland, towards the town of Halaban, where he was joined by a number of Republican officials and military leaders.

[25][28] The PDRI further announced the formation of a commissariat in Java, which was to be headed by Republican leaders who had evaded capture such as Soekiman Wirjosandjojo and Ignatius Joseph Kasimo Hendrowahyono.

[34] While in Bidar Alam, he used a generator-powered radio transmitter of the Indonesian Air Force to maintain contact with both the international world (for example, congratulating Jawaharlal Nehru for his inauguration as Indian Prime Minister) and the scattered members of PDRI.

Sjafruddin left after the meeting, but a number of leaders (such as Chatib Sulaiman [id]) stayed the night there and were killed in a Dutch ambush at dawn the next day.

[9] The Dutch, frustrated with continued Indonesian resistance, eventually approached Sukarno and Hatta in order to negotiate, bypassing Sjafruddin's emergency government.

This caused significant anger amongst Acehnese leaders such as Daud Beureu'eh, and only successive visits by Sjafruddin, Assaat, Hatta, and finally Natsir himself calmed the situation.

[47] While drafting a provisional constitution for the federal state, Sjafruddin argued unsuccessfully for the inclusion of a clause whereby Hatta would become Prime Minister in the event of a political deadlock.

[51][54] According to Sjafruddin in a later interview, beyond reining in inflation, this also served to create uniform legal tender for the whole country and remove unwanted Dutch currency from circulation.

[18][52] The Bank of Java claimed that the policy reduced the money supply by 41 percent, and that the prices of food and textiles still rose in 1950 after the execution of the Sjafruddin Cut.

[47][56] Despite the improving financial situation, Sjafruddin maintained strict budgetary controls by retaining an unpopular colonial-era tax, refusing to raise salaries of civil servants, and rejecting calls to provide funding to political parties.

The government of Sukiman had intended to sign the multilateral agreement in order to improve relations with the United States and the democratic camp of the Cold War on top of receiving reparations and economic benefits.

Sjafruddin maintained his post after NU opted to back his second term, aided by favours given to NU-related businesses by fellow Masyumi member and sitting finance minister Wibisono.

[74] Throughout December 1957, Masyumi leaders Sjafruddin, Natsir, and Burhanuddin Harahap were subjected to accusations by the media of being complicit in the assassination attempt, and they were harassed by phone calls and by paramilitary groups affiliated with PNI and PKI.

[82] Sjafruddin had previously attempted to convince the military officers to exercise restraint and avoid a civil war, but he eventually agreed to take part in PRRI.

[83] The Indonesian government under prime minister Djuanda Kartawidjaja issued an order to arrest Sjafruddin and the other civilian leaders the following day, and within a week aerial attacks were launched against cities in West Sumatra.

PRRI's leaders had failed to gain significant popular support for the movement, and while it initially received some backing from the United States, military aid was soon withdrawn.

By July, the rebel stronghold at Koto Tinggi where Sjafruddin and the other Masyumi/PRRI leaders resided had been captured, forcing them to flee and disabling their capacity to lead the rebellion.

[88] Army Chief of Staff Abdul Haris Nasution, in order to further split the government of PRRI, announced an amnesty program for rebelling troops in late 1960.

[87][88] Sjafruddin and Natsir appointed Maludin Simbolon to represent PRRI in negotiating with the central government, but the military leaders opted to surrender separately.

[101] In 1980, he became a member of the "Petition of Fifty" opposition group, alongside former PRRI colleagues Natsir and Harahap and retired generals such as Nasution, Ali Sadikin, and Hoegeng Iman Santoso.

[102] The petition questioned the conduct of the Indonesian National Armed Forces, its collaboration with Golkar, Suharto's accumulation of wealth, and his use of Pancasila, Indonesia's foundational philosophical theory, as a political weapon.

Sjafruddin viewed this statement as an argument allowing the participants of the state to maintain their own unique identities – and that Pancasila's universal enforcement would eliminate the diversity.

[118] While agreeing with communists on the necessity of social justice and praising them for successful attempts in Europe to improve working conditions, Sjafruddin was fundamentally opposed to Marxism due to its atheism.

[121] Still, following liberal modernist Islam,[122] he also argued that modern Muslims should be allowed to diverge from Muhammad on worldly issues,[6] and hence Sjafruddin disagreed with the interpretation of bank interest as riba.