Indonesian stocks suffer historic plunge
MSCI announced on October 15 that it was considering reclassifying Indonesia from emerging-market to standalone-market status.
On October 16, Jakarta's benchmark stock index plunged as much as 11.4%, its steepest one-day decline since January 1998.
Trading was halted for 30 minutes after an initial 8% fall. Shares of three major Indonesian banks dropped nearly 15%, while the rupiah weakened to around 18,070 per US dollar.
If implemented, the proposed reclassification could remove Indonesian equities from major global indexes, potentially triggering selling by index-tracking funds. MSCI cited persistent concerns about market transparency and investor protection. The consultation runs until April 30, 2027, with a final decision expected by June 30, 2027. No final downgrade has been implemented.
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