OJK Warns of Capital Outflows from Indonesia's Capital Market Amid Middle East Conflict

Jakarta — The escalation of the conflict involving Iran with the United States (US) and Israel has sparked global uncertainty and could weigh on domestic financial markets. In such a situation, the Financial Services Authority (OJK) is wary of potential short-term capital outflows.

Acting Chief Executive for Market Surveillance, Derivatives Finance, and the Carbon Exchange at OJK, Hasan Fawzi, said he would continue to monitor the market intensively to observe liquidity movements and market risks carefully and tightly. This step is being taken in coordination with other bodies within the corridor and forum of the Financial System Stability Committee (KSSK).

“We at OJK will indeed continue to conduct intensive monitoring and close monitoring of liquidity and market risk. We will continue to ensure the stability of the financial services sector,” Hasan said, quoted by Antara on Wednesday, 4 March 2026.

Hasan explained that Indonesia’s economy remains fundamentally relatively stable with macro indicators still intact. However, he urged market participants to remain vigilant against potential transmission through volatility and ongoing global sentiment.

He noted that market pressure arising from geopolitical escalation is not only affecting Indonesia but also affecting regional and global markets. The majority of major world stock indices were recording early declines in response to rising uncertainty.

“So it can be understood that the stock market price-in and risk-off events for what is to come, and before other sectors, we usually see the initial impact first in the stock market response in our market,” Hasan explained.

The volatility of the Jakarta Composite Index (IHSG), Hasan said, is part of a normal global transmission. At present, investors tend to reassess risk and adjust portfolios as geopolitical conflict escalates.

To maintain stability, OJK coordinates with the Indonesia Stock Exchange (BEI) and other related institutions. A number of market safeguards remain in effect, including the share buyback policy without General Meeting of Shareholders (GMS) approval in certain conditions.

In addition, regulators apply the lower auto-rejection mechanism to curb price declines that are too sharp. If panic and one-sided markets occur, BEI can also impose a trading halt if the pressure is deemed significant.