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Jakarta, Oktober 27, 2026 – Indonesia’s financial regulators have moved decisively to shore up market credibility after a sharp selloff triggered by MSCI’s warning that the country could face a downgrade to “standalone” market status.
The announcement rattled investors, sending the Jakarta Composite Index to its lowest level in six years and raising concerns about foreign capital flight.
The Indonesia Stock Exchange (IDX) unveiled a series of reforms aimed at restoring confidence.
Independent members, including academics and foreign investor representatives, will now join oversight committees monitoring stocks with concentrated ownership.
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In addition, shares with high ownership concentration will be excluded from the main Jakarta index starting November 2.
Regulators also pledged to investigate suspected coordinated trading and granted themselves authority to freeze investor accounts if manipulation is detected.
The Financial Services Authority (OJK) complemented these measures by lowering the auto rejection limit to 7 percent and extending buyback allowances until mid 2027.
Officials emphasized that these steps are designed to stabilize trading activity and reassure global investors that Indonesia remains committed to transparency.
OJK also intensified communication with MSCI and other index providers to prevent further erosion of trust.
The selloff earlier this month was severe. Between October 16 and 19, the Jakarta Composite plunged to 4,907 points, its weakest level since 2020.
Although the index rebounded nearly 5 percent by October 23, closing at 5,439, the rupiah slipped 0.4 percent, marking its lowest level since July.
Investor sentiment remains fragile, with many awaiting proof that reforms will be enforced effectively.
President Prabowo Subianto criticized MSCI’s stance as “intimidation,” signaling political resistance to external pressure.
Yet analysts warn that a downgrade to standalone status would sharply reduce foreign inflows, as many funds benchmark their portfolios against MSCI classifications.
Such a move could weaken Indonesia’s competitiveness relative to regional peers like Vietnam and the Philippines.
For Jakarta, the stakes are clear: credibility in global markets is inseparable from economic resilience.
The coming months will test whether Indonesia’s rapid regulatory overhaul can convince investors that its markets remain worthy of “emerging” status.
