Indonesia's main stock index crashes 11.4% after MSCI downgrade suggestion
Indonesia's main stock index crashed 11.4% on Friday, Oct. 16, 2026, the sharpest drop in nearly three decades, after MSCI suggested downgrading the country from emerging market status.
The move raised big concerns about transparency and market rules, and sent the rupiah to 18,070 per US dollar, its lowest level since late July and close to its record low of 18,190.
Indonesian banks' shares tumble amid downgrade
Major banks like Bank Central Asia and Bank Mandiri saw their shares tumble nearly 15%.
If MSCI goes through with the downgrade, Indonesia could be removed from major global indices, forcing big funds to pull out even more money.
Josua Pardede, chief economist at Bank Permata, said Indonesia needed to show clear and measurable progress in these areas rather than simply announce further reforms and rebuild its reputation as a transparent, well-regulated and dependable destination for long-term international investors.