Antara News·Indonesia·Thursday, October 22, 2026 at 12:26 AM UTC

Indonesia races to protect emerging market status against MSCI

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Maria Cicilia Galuh Prayudhia, Yashinta Difa

Jakarta (ANTARA) - Indonesia is fast-tracking comprehensive capital market reforms to preserve its status as an emerging market, following a high-stakes warning from global index provider Morgan Stanley Capital International (MSCI).

Financial Services Authority (OJK) Board of Commissioners Chairperson Friderica Widyasari Dewi said the ongoing structural improvements aim to elevate the market's credibility, liquidity, and transparency while strengthening its foundation for long-term investments.

"We are making every effort to ensure Indonesia remains an emerging market,” Friderica told reporters following a plenary cabinet meeting at the Presidential Palace complex, Jakarta, Wednesday (October 21).

The regulatory push follows an announcement by MSCI on 16 October launching a consultation period regarding a potential reclassification of Indonesia from an emerging market to a standalone market, with a final decision anticipated by June 2027.

The announcement triggered immediate market pressure, causing the rupiah to weaken to Rp18,052 per US dollar on Friday (October 16) and Rp18,050 on Monday (October 19), according to the Jakarta Interbank Spot Dollar Rate (JISDOR).

She stressed that the ongoing reforms are part of a broader, long-term national strategy rather than a knee-jerk reaction to the MSCI scrutiny.

“We are not carrying out these improvements because of one specific global index provider," Friderica stated.

"Rather, since January—following the President’s instructions—we have been addressing existing shortcomings to make Indonesia’s capital market increasingly credible, liquid, and transparent,” she emphasized.

While declining to speculate on potential capital outflows should a downgrade materialize, Friderica emphasized that the government, backed fully by President Prabowo Subianto and relevant ministries, is taking all necessary steps to safeguard the nation's investment appeal.

Demonstrating its stricter stance, the OJK recently imposed record administrative fines totaling Rp2.1 trillion (approximately $116.4 million) on three publicly listed companies for market violations.

OJK officials have vowed that strict enforcement will remain a continuous priority.

In tandem, the Indonesia Stock Exchange (IDX) announced plans to mandate the disclosure of share affiliations involving ownership stakes of one percent or more and to remove stocks with high shareholding concentration from the Jakarta Composite Index (JCI).

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