{
  "id": 15630532,
  "title": "Indonesian exchange seeks to calm market after record rout",
  "url": "https://urgent.news/2026/10/18/indonesian-exchange-seeks-to-calm-market-after-record-rout",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-18T21:00:00.000Z",
  "source": {
    "name": "Gulf Times Business",
    "slug": "gulf-times-business",
    "url": "https://www.gulf-times.com/article/736166/business/indonesian-exchange-seeks-to-calm-market-after-record-rout"
  },
  "original_language": "en",
  "account": "Indonesian stocks experienced the most severe two-day decline in history, following MSCI's warning on Friday that it might strip the country of its emerging market status next year. The Jakarta benchmark stocks fell 3.6% on Monday, after sliding 11.6% on Friday, marking a two-day drop deeper than any during the 1998 Asian financial crisis. The index also hit a six-year low during the session.\n\nThe panic selling commenced after MSCI announced on Friday that it was contemplating shifting Indonesia to standalone status, a more severe downgrade than initially expected, which alarmed investors and officials. This move could potentially strip Indonesia off from international capital and diminish it as an investment destination. The market instability subsequently impacted the Indonesian currency and bond markets. The rupiah weakened to 18,030 per dollar, near a June record low of 18,190, and government bonds pushed the 10-year yield to 7.4%, up from 7.169% on Friday.\n\nIndonesia's capital market chief Jeffrey Hendrik expressed surprise at the MSCI announcement, stating the market reacted in panic due to the unexpected news. Following an online meeting with MSCI, Hendrik reiterated Indonesia's commitment to capital market reforms launched after the initial MSCI warning in January. He also unveiled two initiatives to enhance market transparency and price discovery, such as excluding stocks with high concentration of ownership by the same individual or entity from the benchmark Jakarta Composite Index to provide a clearer picture of the index's movements. Additionally, the Jakarta Index (IDX) reduced the daily down limit for stock prices from 15% to 7% to curb further declines.\n\nMSCI's decision has further pressed on Indonesia's regulators and finance officials, as investors reassess their exposure to Indonesian assets. The incident has also escalated concerns of capital flight from a nation that had been an attractive emerging market. Despite the pandemic, foreign investors have already shown a deteriorating interest in Indonesia, with confidence waning due to concerns over the country's fiscal health and the independence of its central bank under President Prabowo Subianto.\n\nPrabowo met with financial officials on Monday to discuss the current economic condition, according to government officials. Rain Lin, an S&P Global Ratings sovereign analyst, suggested MSCI's latest warning would likely trigger additional capital outflows, but didn't anticipate them to be of a magnitude that would significantly hike financing costs. However, the warning comes amid a series of setbacks for Prabowo's government this year, including sovereign rating downgrades from Moody's and Fitch, which have raised concerns about the government's future stability. Furthermore, it precedes a possible policy decision from Indonesia's central bank this week, with some analysts considering a rate hike to curb the sell-off in the bond market.",
  "summary": "Indonesian stocks suffered the deepest two-day sell-off recorded, while authorities in Jakarta demanded an explanation from MSCI whose warning on Friday that it could strip the country of \"emerging ma...",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}