Global Trust Crisis: Economist Warns of the Fatal Impact of Policy Uncertainty and Shallow Capital Markets

Thu, 26 Feb 2026, 21:53 WIB | By indrastuti | Source: MEDIA_INDONESIA | Finance

The removal of outstanding dues needs to be realized first while considering economic conditions.

MSCI has temporarily suspended the rebalancing of the Indonesian stock index since January 27, 2026, due to concerns about free float transparency and the potential for coordinated trading behavior.

In a public seminar entitled ‘Indonesian Economic Stability in the Eyes of Global Rating Agencies, How Does the Government Respond?’, held at Atma Jaya University Jakarta on Thursday (February 26), experts highlighted a crisis of trust from global rating agencies triggered by structural problems and government policy-making patterns.

Economist and UGM lecturer Denni Purbasari emphasized that the government currently faces a major challenge in identifying the actual ‘disease’ of the economy, which risks leading to incorrect policy decisions or fiscal ‘medicine’. According to her, political pressure to achieve instant results often leads the government to take steps that endanger long-term economic health.

Denni Purbasari likened the identification of economic problems to a doctor who has difficulty distinguishing between a fever and an internal organ infection.

She stated that many politicians want quick achievements, so the medicine must be effective without regard for the cost. This is considered fatal because it is as if the government is giving steroids to the economy at the expense of fiscal health and the stability of the financial system.

This condition is exacerbated by negative sentiment from global rating agencies such as MSCI, which Denni considers a representation of distrust in data transparency in Indonesia.

According to Denni, this issue of trust is the main foundation for capital markets to function properly. She emphasized that what is announced by global rating agencies is only the tip of the iceberg.

‘Trust is the currency in the market, and if investors are not sure about the honesty of a country’s information, they will withdraw because the risk is too high,’ she said.

Denni warned that Indonesia should not fall into complacency because the risk of falling to a lower market level always exists if the integrity of public institutions continues to deteriorate.

In line with these concerns, economist and Unika Atma Jaya lecturer Agustinus Prasetyantoko explained that the current condition of the Indonesian capital market is still very shallow and highly dependent on banking or is bank-centric.

Although the number of investment account holders appears large, the number of investors who are actually actively trading is very small, only about two hundred thousand people. ‘This discrepancy between administrative data and market reality is one of the reasons why international agencies are starting to question the credibility of national economic governance,’ he said.

Pras explained that the reaction from rating agencies such as Moody’s and S&P is a response to government policies that are sometimes difficult to understand or inconsistent. He believes that data transparency is fundamental so that government policies can be trusted by the public and global investors.

Regarding the current policy direction, Pras mentioned that the steps taken by the government can actually be understood if referring to a certain way of thinking.

‘Actually, if we read the book ’The Indonesian Paradox and Its Solutions’, it is very clear and what the government is doing today is translating that book. Thus, understanding the government’s underlying thinking is key to seeing the big picture behind the current market volatility,’ he said. (H-2)

BUMI early 2026 is crucial, CIC is only 2.81% after divestment, free float of 41.31% boosts liquidity. Target 330-344, stop loss 250; volume is key. Watch out for MSCI correction!!

The results of the MSCI rebalancing in February 2026 were officially released. INDF has been downgraded to Small Cap, while ACES and CLEO have been removed from the index. Check the effective schedule.

Acting Director General of the Indonesia Stock Exchange, Jeffrey Hendrik, said that the IDX is scheduled to hold a follow-up meeting with MSCI on February 11, 2026.

The Financial Services Authority (OJK) together with the Indonesia Stock Exchange (IDX) summoned the Indonesian Listed Companies Association (AEI) to discuss the plan to increase the portion of shares in circulation (free float) to 15%.

Increasing the minimum limit of free float shares to 15% and the plan to demutualize the Indonesia Stock Exchange (IDX) are part of the agenda for reforming the national capital market.

Director of PT Mandiri Sekuritas, Oki Ramadhana, expressed his optimism regarding the proposal submitted by PT Indonesia Stock Exchange (IDX) to global index provider MSCI.

The IDX is accelerating the proposal to MSCI & FTSE. The 15% free float rule is in the final stage of the OJK, while the list of concentrated shareholders will be released soon.

BUMI early 2026 is crucial, CIC is only 2.81% after divestment, free float of 41.31% boosts liquidity. Target 330-344, stop loss 250; volume is key. Watch out for MSCI correction!!

Economist at LPPI, Ryan Kiryanto, predicts that Bank Indonesia will maintain the BI Rate at 4.75% amid inflation above 3% and the weakening of the rupiah to Rp16,884 per US dollar.

COORDINATING Minister for Economic Affairs, Airlangga Hartarto, claimed that the national financial market conditions are gradually stabilizing after experiencing pressure.

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