Indonesia Confident of Retaining Emerging Market Status
The Indonesian government is confident that Indonesia’s market index will remain within the emerging market category. This was stated by the Coordinating Minister for Economic Affairs, Airlangga Hartarto, in Jakarta on Friday (19/6), in response to reports from global index provider MSCI Inc. In the MSCI 2026 Global Market Accessibility Review, MSCI has maintained Indonesia’s position within the ‘emerging market’ category.
In the report, there was one adjustment to Indonesia’s assessment, specifically regarding the ‘Information Flow’ criteria, which moved from ‘+’ to ‘−’. The government views this note as a confirmation of the direction of the ongoing capital market reform agenda.
“The MSCI note actually confirms that Indonesia’s economic fundamentals and market access remain strong. The focus is on market transparency and integrity, and that is precisely where we are working,” said Airlangga.
“The Government, together with the OJK (Financial Services Authority) and the IDX (Indonesia Stock Exchange), has been and continues to implement concrete reforms, ranging from free float adjustments and ultimate beneficial ownership disclosure to market deepening. We are optimistic that Indonesia remains on the emerging market track, and the Government is committed to completing this reform agenda to maintain investor confidence,” he added.
MSCI highlighted that Indonesia’s market access, size, and liquidity are still considered adequate, and there were no issues regarding foreign ownership restrictions, which were a focus of this year’s review.
The areas identified for improvement focus on enhancing the quality of share ownership structure disclosure and strengthening price formation integrity—areas that are currently priorities for the government and relevant authorities.
Notes regarding the provision of market information in English are also being optimised to improve ease of access for global investors. Aggregately, MSCI stated that in this year’s cycle, there were more improvements than downgrades within the ‘emerging markets’ group.
The adjustment to market accessibility ratings for 2026 was experienced only by Indonesia and Turkey. It is important to emphasise that this adjustment does not change Indonesia’s status as an emerging market. The official market classification decision will be announced by MSCI through the Annual Market Classification Review on 23 June 2026. Furthermore, the government and relevant authorities have placed the strengthening of market transparency and integrity as a priority.
The MSCI note aligns with the direction of reforms being accelerated by the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX), supported by synergistic policies across authorities.
Several of the Government and OJK’s commitment steps to support the capital market include: first, the free float policy increasing from 7.5 per cent to 15 per cent to increase market liquidity (effective from March 2026, with gradual fulfilment); second, transparency of Ultimate Beneficial Owners (UBO) through system development and ownership disclosure (ongoing and being strengthened); third, the disclosure of shareholder names with ownership exceeding 1 per cent (in effect, with regular publication since March 2026); fourth, the acceleration of the demutualisation of the Indonesia Stock Exchange (in progress); fifth, integrated market deepening through increasing the investment limit for shares by pension funds and insurance companies to 20 per cent, focusing on LQ45 stocks; sixth, strengthening rule enforcement and sanctions; seventh, improving corporate governance for issuers; and eighth, strengthening synergy between stakeholders.
Airlangga explained that these steps are bolstered by a stable macroeconomic foundation. Exchange rate stability, controlled inflation, and a prudent mix of fiscal and monetary policies serve as the anchor for investor confidence in the national economy.
“The Government believes that the combination of structural capital market reforms and macroeconomic stability will continue to strengthen the attractiveness and credibility of the Indonesian market in the eyes of global institutional investors,” he explained.
From an external sector perspective, the government and Bank Indonesia continue to maintain market confidence through measured policy mixes, including the adjustment of the benchmark interest rate to 5.75 per cent in June 2026, strengthening foreign exchange market stability and deepening, prudent debt management including the issuance of Government Securities (SUN) in foreign currency denominations, and strengthening the coordination of monetary and fiscal policies to maintain liquidity adequacy.
This combination of measures serves as a buffer for external sector resilience and supports investor confidence amidst global dynamics. Furthermore, the Government urges market participants to remain calm and respond to this review results proportionally.
“The Government continues to coordinate with MSCI and the global investor community, and ensures that the reform agenda proceeds consistently ahead of the classification announcement on 23 June 2026 and the next review cycle,” explained the Coordinating Minister.