Indonesia's Prabowo Rejects MSCI Downgrade Warning After Stock Sell-Off

Indonesian President Prabowo Subianto on Wednesday rejected MSCI's warning that the country's stock market could be downgraded to "standalone" status, saying Indonesia "fears no one" and will not be pressured by external parties. The index provider's Oct. 15 consultation on the proposed reclassification has rattled investors and contributed to a sharp sell-off in Indonesian stocks over the past two trading sessions. MSCI cited concerns over coordinated trading practices in Indonesia's stock market and whether authorities have taken sufficient steps to address them, saying its assessments follow transparent, rules-based methodologies. A downgrade from "emerging" to "standalone" status could trigger multi-billion-dollar capital outflows from funds tracking emerging market indexes. Government spokesperson Syahganda Nainggolan said Thursday that Prabowo's remarks were intended as an invitation to dialogue without pressure or coercion, not a challenge to MSCI. The dispute follows allegations by former Trade Minister Muhammad Lutfi that Singapore's Temasek Holdings and GIC pressured MSCI over Indonesia's market status; both firms rejected the claim.