Indonesia's IHSG plunges amid MSCI doubts and high rate hikes

The Jakarta Composite Index (IHSG) fell 4.55% during the week of 22‑26 June 2026, closing at 5,896.13 from 6,177.14. The market‑capitalisation of the Indonesia Stock Exchange dropped 4.51% to roughly IDR 10,302 trillion, and the average daily transaction volume shrank 22.95% to about 1.73 million trades.

The volatility intensified over three consecutive days. On 24 June the index plunged 3.56% to 5,883.88 after MSCI announced that Indonesia would remain an emerging market but highlighted concerns over share‑ownership transparency and free‑float methodology. It rebounded 1.96% on 25 June, then slipped another 1.72% on 26 June. Analysts cited three main drivers: the MSCI review, Bank Indonesia’s benchmark rate hikes to 5.75% (up 100 bps three times in a month), and a weakening rupiah trading around 17,900‑18,000 per USD.

“Kautsar Primadi Nurahmad, the BEI secretary, said the index was forced down from its psychological level,” one report noted. Research head Muhammad Wafi described the move as “structural repricing” and warned that “volatility will likely continue for two to four weeks until clarity on MSCI status, a stable rupiah and fiscal policy is achieved.” Market observers also pointed to government‑bond proposals and coal‑export policy debates as additional risk factors.