JAKARTA, Oct 21 — Indonesia’s president lashed out at MSCI today, accusing the index compiler of “trying to scare us” over its threat to downgrade the country’s stock market.
MSCI said last week it was “no longer appropriate” to classify Indonesia as an emerging market, citing investor concerns over shareholding structures and trading behaviour.
The benchmark Jakarta Composite Index (JCI) then plunged more than 11 per cent on Friday — its biggest single-day fall since 1998 — on fears of an exodus of foreign investment.
Addressing his cabinet today, Prabowo Subianto said: “We continue to be confronted by all kinds of things, MSCI, all sorts of things, trying to scare us.
“I only say this to MSCI: the Indonesian nation is not afraid of anyone and will not be intimidated.”
The JCI closed 0.94 per cent higher today, having sunk earlier in the week to its lowest level since late 2020.
It has plummeted more than 40 per cent since the start of the year, placing it among the world’s worst-performing indexes.
The MSCI has cited investor concerns over “ongoing opacity in shareholding structures” as well as coordinated trading behaviour that has affected price information.
It is considering reclassifying Indonesia as a “standalone market”, which could force investment funds tracking the MSCI’s emerging market indexes to sell Indonesian holdings.
On Monday, Indonesia Stock Exchange (IDX) boss Jeffrey Hendrik announced measures to improve market transparency, including publicly providing more information on small shareholders.
The IDX would also remove “all shares with high shareholding concentration from the composite stock price index” to provide a more reasonable picture of JCI movements.
Indonesia’s economy has been hit hard by surging fuel prices due to the Middle East war.
The country of 287 million people is a net oil importer, but the government has insisted on leaving heavily subsidised fuel prices unchanged, despite struggling with high costs.
As food and commodities prices have risen, albeit within the target range, the economic strain has triggered protests, and Prabowo’s ratings are at a record low.
Today he said the country faced “many” difficulties and disruptions.
“We are not afraid. We have strength, we have courage, and we are willing to make sacrifices,” Prabowo said.
“We do not know the meaning of surrender… If necessary, we will carry out massive savings. We will be even more thrifty later on.”
Indonesia’s central bank today kept its key lending rate steady at 5.75 per cent after three hikes so far this year. — AFP
Date: 21 October, 2026 7:57 pm
Source: Malay Mail
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