Indonesia stock market and rupiah dip amid global rate hopes and MSCI review

Morgan Stanley Capital International (MSCI) confirmed Indonesia’s continued status as an Emerging Market, noting that the focus has shifted from announcing reforms to demonstrating their effectiveness. Analysts said the decision reflects progress in transparency, price formation and market oversight by the OJK, BEI and KSEI.

Indonesia’s equity index showed mixed moves: the Jakarta Composite Index (IHSG) rose nearly 2 % in early trading on June 25, driven by foreign net buying of about IDR 187 billion and strong performance in infrastructure stocks, but later fell sharply, posting a 3.5 % decline to 5,883 and a 217‑point drop to 5,883 after political comments. Other sessions saw the index swing between gains and losses, with a 2.69 % rise in the first session and a 4.20 % fall on June 5.

The rupiah weakened further, trading around IDR 17,960‑17,970 per US $, its lowest near the 18,000 mark. The depreciation was attributed to rising expectations of U.S. Federal Reserve rate hikes, strengthening of the dollar index and the lingering impact of the MSCI market‑accessibility review. Analysts forecast the currency to stay in the IDR 17,900‑18,000 range.

Despite currency pressure, the insurance sector’s unit‑link premiums grew 11.14 % year‑on‑year to IDR 14.86 trillion, indicating sustained investor interest in combined insurance‑investment products.