Prabowo rejects external pressure
Indonesian President Prabowo Subianto rejected a warning that could lead to a downgrade of the country’s stock market. During a Cabinet gathering, he accused Morgan Stanley Capital International of trying to pressure Indonesia. Prabowo said the nation would not fear outside parties or retreat from its position.
His remarks continued the nationalist rhetoric he has often used since taking office in 2024. Prabowo again referred to foreign interference, although he offered no specific details. However, government spokesperson Syahganda Nainggolan said the comments were not intended as a challenge to MSCI. Instead, he described them as an invitation to constructive dialogue without pressure or coercion.
MSCI considers a major downgrade
On October 15, MSCI opened a consultation on changing Indonesia’s classification from an emerging market to a standalone market. The index provider cited concerns about coordinated trading practices and the adequacy of regulatory responses. It also said its market assessments follow transparent, rules-based methods.
The warning unsettled investors and contributed to a sharp sell-off during two trading sessions. A downgrade could reduce Indonesia’s appeal to international investors and cause capital outflows worth billions of dollars. Funds tracking emerging-market indexes could withdraw money if the country loses its current classification. Meanwhile, MSCI said it would monitor developments and continue engaging with market participants and authorities.
Regional allegations deepen the dispute
Former Trade Minister Muhammad Lutfi added another element by accusing two Singaporean state investment companies of influencing MSCI. He named Temasek Holdings and GIC as participants in alleged pressure over Indonesia’s market status. Both companies rejected the accusation.
The dispute therefore combines concerns about market regulation, investor confidence and political resistance to perceived foreign influence. Prabowo maintained a defiant public stance, while his spokesperson emphasized willingness to hold discussions. For its part, MSCI kept the proposed downgrade under consultation rather than announcing a final decision.
References
Karmini, N. (2026, October 22). Indonesian leader rejects market downgrade warning after stock market sell-off. AP News. https://apnews.com/article/indonesia-stock-market-msci-warning-b8b593b960cde0ed6db837144ca68798