TEMPO.CO, Jakarta - Morgan Stanley Capital International (MSCI) is scheduled to release the results of its annual market classification review next week. In the review, MSCI will decide whether Indonesia will retain its status in the emerging market group or face a downgrade to a frontier market.
As an initial reference point, MSCI released its Global Market Accessibility Review 2026 on Friday, June 19, 2026. The findings reveal that MSCI has downgraded Indonesia's information flow status to negative while maintaining a negative outlook on the liberalization of the country's foreign exchange market.
An economist from Paramadina University Wijayanto Samirin assesses that the likelihood of Indonesia being downgraded to a frontier market remains slim. This is because the size of the Indonesian market is relatively large and plays a pivotal role in the region. "However, MSCI's notes alone are enough to trigger a fairly large foreign net sell," he told Tempo on Thursday, June 19, 2026.
According to Wijayanto, the negative rating for information flow indicates that MSCI's lingering concerns regarding transparency within the Indonesian capital market remain unresolved. In other words, MSCI perceives that the domestic capital market authority has failed to implement serious institutional improvements.
Regarding MSCI’s spotlight on the foreign exchange market, Wijayanto believes the concern stems from Bank Indonesia's policy trajectory, which increasingly restricts foreign exchange transactions.
Most recently, Bank Indonesia announced plans to cap non-underlying foreign exchange purchases at US$10,000 per person per month in a bid to prop up the rupiah exchange rate. Additionally, Wijayanto noted that policies governing export foreign exchange earnings have only heightened MSCI's concerns.
Wijayanto opined that the investment feasibility of any given market drops if it becomes disconnected from global financial ecosystems. "Exchange control measures are a characteristic of a frontier market, and these traits are increasingly visible in our capital market," he warned.
Nevertheless, Wijayanto still predicted that Indonesia will manage to hold its ground in the emerging market category. However, he cautioned that if this trend of anti-market policies persists over the coming years, Indonesia could eventually be reclassified as a frontier market.
In response to MSCI's assessment, Hasan Fawzi, Executive Head of the Capital Market, Financial Derivatives, and Carbon Exchange Supervision at the Financial Services Authority (OJK), stated that the feedback is part of a constructive improvement process.
"Regarding the information flow, we view this input as part of a constructive evaluation process that aligns with the capital market reform agenda currently being pursued jointly by the OJK, the Indonesia Stock Exchange, the Indonesia Central Securities Depository, the Indonesia Clearing Guarantee Corporation, and all industry stakeholders," he said in an official statement on Friday, June 19, 2026.
The OJK also highlighted that MSCI acknowledged a number of regulatory improvements enacted by Indonesia. This progress is evidenced by the reduction of several notes regarding the liberalization of the foreign exchange market, even though the final assessment score remained in negative territory, as they were last year. To address MSCI's concerns, Hasan affirmed that the OJK will continue to coordinate closely and intensively with relevant authorities, including Bank Indonesia.
Read: MSCI Cites Forex Market Issues in Indonesia Review
Click here to get the latest news updates from Tempo on Google News
What IDX Says About the MSCI Review
47 menit lalu
Indonesia Stock Exchange (IDX) speaks up about the results of the market accessibility review released by Morgan Stanley Capital International (MSCI).
MSCI Cites Forex Market Issues in Indonesia Review
4 jam lalu
MSCI assesses the liberalization of the foreign exchange market in relation to the ease of capital inflows and outflows.
MSCI Downgrades Indonesia's Information Flow Rating to Negative
7 jam lalu
Recent MSCI review sees Indonesia's information flow rating plummet from positive to negative.
Why Investors Are on Edge Ahead of MSCI, FTSE Russell Reviews
19 jam lalu
Kiwoom Sekuritas is optimistic that Indonesia's status will not be downgraded from an "emerging market" to a "frontier market."
JCI, Rupiah End Lower Ahead of MSCI Announcement
21 jam lalu
By the end of the first session, the Jakarta Composite Index (JCI) had weakened by 1.06 percent.
JCI Closes Lower as Market Volatility Persists
20 hari lalu
The Jakarta Composite Index (JCI) closed at 6,127 on Friday, May 29, 2026.
MSCI Highlights Liquidity of Indonesia's GoTo Stock
20 hari lalu
The price of GoTo's stock has remained at Rp50. Since the beginning of the year until May 29, 2026, PT GoTo Gojek Tokopedia's stock has dropped by 27 percent.
JCI Plummets 3.53% This Week Amid MSCI Rebalancing
36 hari lalu
JCI experienced a negative trend this week after the MSCI rebalancing announcement. Foreign capital outflow reached Rp1.53 trillion.
Analysts Predict Rp31tn in Foreign Capital May Exit Indonesian Stocks
36 hari lalu
An analyst estimated that up to Rp31 trillion in foreign capital could leave the Indonesian stock market following the MSCI index adjustment.
Today's Top 3 News: Indonesians Urged to Repatriate Offshore Assets, MSCI Rebalancing
36 hari lalu
Here is the list of the top 3 news on Tempo English today.
