Local shares suffered their steepest decline since the Asian Financial Crisis in the late 1990s following the announcement. The Indonesia Stock Exchange responded by stating it has taken steps to enhance capital market transparency and will seek clarification from MSCI regarding the basis of the assessment. Analysts warn that Indonesian stocks will likely face further outflows if the downgrade is finalized, while MSCI maintains a freeze on Indonesian index changes during the review.
Tuesday, October 20, 2026
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Indonesia's Stocks Suffer Worst Drop Since 1990s on MSCI Downgrade
Global Markets5 days ago
The Indonesian rupiah fell to 18,000 per dollar after MSCI proposed stripping the nation of its emerging-market status. The index provider has launched a consultation to reclassify Indonesia's equity indexes to "Standalone Market" status, stating that the country no longer merits its current designation. This move could eject Indonesian shares from several global benchmarks, heightening the risk of foreign investor flight due to concerns over market integrity.
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