President Prabowo rejects MSCI market downgrade proposal

Indonesian President Prabowo Subianto has rejected warnings from Morgan Stanley Capital International (MSCI) regarding a potential downgrade of Indonesia’s stock market classification. Speaking during a plenary cabinet meeting in Jakarta, Prabowo accused the New York-based index provider of attempting to intimidate the nation.

MSCI recently opened a consultation on a proposal to reclassify Indonesia’s equity market from ‘emerging market’ to ‘standalone market’. The index provider cited concerns regarding coordinated trading practices in the Indonesian stock market and whether regulatory authorities have implemented sufficient measures to address them.

A downgrade could trigger multi-billion-dollar capital outflows as international funds tracking emerging market indexes may be forced to divest. The prospect of the reclassification has already contributed to a sharp sell-off in Indonesian stocks over recent trading sessions. Prabowo maintained that the Indonesian nation possesses the strength and courage to face such external pressures without backing down.