Indonesia central bank sees MSCI warning as short-term market shock
Indonesia's central bank says MSCI's warning over a possible downgrade of the country's stock market is a short-term disruption rather than a lasting setback. The assessment comes as authorities work to improve market transparency and keep focus on rupiah stability and inflation expectations.
Highlights
- Bank Indonesia Governor Destry Damayanti called MSCI's warning of possible downgrade to standalone status a temporary shock, expecting recovery after reforms.
- Destry stated ongoing OJK reforms should address MSCI transparency concerns, following a more severe downgrade risk than MSCI's January notice.
- Bank Indonesia will prioritize rupiah stability and considers the current benchmark rate adequate to keep inflation within the 1.5%–3.5% target, with rate changes depending on data.
Market warning and reform response
As reported by Reuters, Bank Indonesia Governor Destry Damayanti says the recent warning from global index provider MSCI about a possible downgrade of Indonesia's stock market to standalone status is a temporary shock.Speaking at an economic event on Thursday, Destry says improvements in transparency cannot happen overnight, but she believes reforms introduced by Indonesia's financial services authority, OJK, will be enough to address MSCI's concerns. She says the market should be able to recover once the issues behind the warning are resolved.
MSCI currently classifies Indonesia as an emerging market. The latest warning is more severe than MSCI's January notice, which flagged a possible downgrade to frontier status.
Policy focus on rupiah and rates
Destry says Bank Indonesia remains focused on stabilising the rupiah in the period ahead. She adds that the current benchmark rate is sufficient to anchor inflation expectations within the target range of 1.5% to 3.5%.Asked about the possibility of a rate increase, she says any decision will depend on incoming data. The comments suggest the central bank is not committing to an immediate policy move while monitoring market conditions and price stability.
In our earlier article on rising sovereign borrowing risks in a higher-rate environment, we examined how persistent geopolitical tensions and elevated fiscal spending are straining public finances and refinancing conditions. We noted that emerging and frontier markets are particularly exposed because debt-servicing costs can be high relative to limited revenue bases, while energy and food price shocks complicate inflation control and credit outlooks.
Latest Bank Indonesia News
-
Afghanistan
-
Albania
-
Algeria
-
Angola
-
Argentina
-
Armenia
-
Australia
-
Austria
-
Azerbaijan
-
Bahamas
-
Bahrain
-
Bangladesh
-
Belarus
-
Belgium
-
Bolivia
-
Botswana
-
Brazil
-
Brunei
-
Bulgaria
-
Cambodia
-
Cameroon
-
Canada
-
Chile
-
China
-
Colombia
-
Congo
-
Costa Rica
-
Cote d'Ivoire
-
Croatia
-
Cuba
-
Cyprus
-
Czechia
-
DR Congo
-
Denmark
-
Dominican Republic
-
Ecuador
-
Egypt
-
El Salvador
-
Estonia
-
Eswatini
-
Ethiopia
-
Finland
-
France
-
Georgia
-
Germany
-
Ghana
-
Greece
-
Haiti
-
Hong Kong
-
Hungary
-
India
-
Indonesia
-
Iran, Islamic republic
-
Iraq
-
Ireland
-
Israel
-
Italy
-
Jamaica
-
Japan
-
Jordan
-
Kazakhstan
-
Kenya
-
Korea
-
Kuwait
-
Kyrgyzstan
-
Laos
-
Latvia
-
Lebanon
-
Lesotho
-
Libya
-
Lithuania
-
Luxembourg
-
Madagascar
-
Malaysia
-
Malta
-
Mauritius
-
Mexico
-
Moldova
-
Mongolia
-
Montenegro
-
Morocco
-
Mozambique
-
Myanmar
-
Namibia
-
Nepal
-
Netherlands
-
New Zealand
-
Nigeria
-
North Macedonia
-
Norway
-
Oman
-
Pakistan
-
Palestine
-
Panama
-
Papua New Guinea
-
Paraguay
-
Peru
-
Philippines
-
Poland
-
Portugal
-
Puerto Rico
-
Qatar
-
Reunion
-
Romania
-
Rwanda
-
Saudi Arabia
-
Serbia
-
Singapore
-
Slovakia
-
Slovenia
-
Somalia
-
South Africa
-
Spain
-
Sri Lanka
-
Sweden
-
Switzerland
-
Syria
-
Taiwan
-
Tajikistan
-
Tanzania
-
Thailand
-
Trinidad and Tobago
-
Tunisia
-
Turkey
-
UAE
-
Uganda
-
Ukraine
-
United Kingdom
-
United States
-
Uruguay
-
Uzbekistan
-
Venezuela
-
Vietnam
-
Yemen
-
Zambia
-
Zimbabwe
- Forex
- Crypto
