Indonesia stock exchange to meet MSCI on Monday, seeking clarification on downgrade warning
The unexpected nature of the downgrade risk has triggered massive selloffs
Indonesia's stock exchange chief executive revealed plans for a meeting with MSCI on Monday, following the global index provider's warning that the country's market could lose its "emerging" status and be downgraded. MSCI's announcement on Friday shocked the Indonesian market, which had already seen its worst day of trading since 1998.
The Indonesian Stock Exchange responded by halving the daily down limit on stock prices to 7 per cent, in an attempt to curb volatility. MSCI cited concerns about market dysfunctions, including coordinated trading and rule enforcement failures, as reasons for the potential downgrade. The Indonesian exchange management expressed surprise at the news, stating that all parties involved felt confident the country met the criteria for maintaining its emerging market status.
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