The move that stunned investors and crashed the Indonesian stock exchange to its lowest since 1998

The Jakarta Stock Exchange plunged 11.6% after MSCI announced the downgrade of Indonesia from 'emerging market' to 'standalone market', the sharpest daily drop since 1998. Fears of tens of billions of dollars in capital flight led to panic trading.

The Jakarta Stock Exchange plunged 11.6% yesterday (Friday), the sharpest daily drop since January 1998, after index provider MSCI announced that Indonesia no longer qualifies for 'emerging market' status. The decision is expected to trigger tens of billions of dollars in capital flight from Southeast Asia's largest economy. MSCI placed Indonesia on a path to being reclassified as a 'Standalone' market, lower even than 'Frontier' status. Since the start of the year, Indonesian stocks have lost nearly 40%, making the exchange the worst-performing in the world in 2026. Foreign investors have pulled $4.6 billion from Indonesian equities since January. UBS estimates an additional outflow of about $4 billion from passive funds and around $15 billion from active investors. The rupiah weakened to 18,070 per dollar. Analysts at Citi noted that confidence has weakened, but their base case remains that the market will retain its emerging market status.