Indonesian President Prabowo Subianto has accused global index provider MSCI of trying to intimidate Indonesia, in his first public reaction to last week’s warning that the country’s stock market could be demoted from emerging-market status. Addressing his cabinet in Jakarta on Wednesday, October 21, 2026, Prabowo said the Indonesian nation would not be cowed, as the Prabowo MSCI intimidation row deepened a market crisis that has already wiped out billions in share value.
“The MSCI… intended to intimidate us,” Prabowo told the cabinet gathering, which was broadcast on the government’s official YouTube channel. “I simply say to the MSCI: the Indonesian nation fears no one and will not be cowed. We possess strength, we have courage, we are willing to make sacrifices, and we refuse to surrender.”
FAKTA
- What happened: President Prabowo Subianto told his cabinet on Wednesday, October 21, 2026, that MSCI was trying to intimidate Indonesia over its threat to downgrade the country’s stock market.
- MSCI’s warning: Last week, MSCI said it was no longer appropriate to classify Indonesia as an emerging market and that it could demote the country’s equities to “standalone” market status.
- Why MSCI acted: MSCI cited concerns over opacity in shareholding structures and coordinated trading practices that have affected price information, saying Indonesia had not done enough to crack down on them.
- The market fallout: The warning triggered a record-breaking two-day stock market rout; the Jakarta Composite Index plunged more than 11 percent on Friday, its biggest single-day fall since 1998.
- MSCI’s response: MSCI said its decisions follow transparent and rules-based methodologies and that it will continue to monitor developments and engage with market participants.
- Where markets stand: The Jakarta Composite Index closed 0.94 percent higher on Wednesday, but has fallen more than 40 percent since the start of the year.
Prabowo MSCI intimidation: what the president said
Prabowo struck a defiant tone throughout the cabinet meeting, his first public comment since MSCI raised the downgrade threat last week. “We continue to be confronted by all kinds of things, MSCI, all sorts of things, trying to scare us,” he said. “I only say this to MSCI: the Indonesian nation is not afraid of anyone and will not be intimidated.”
The president, who has led Indonesia since 2024, said the country faced “many” difficulties and disruptions but would not surrender. “We are not afraid. We have strength, we have courage, and we are willing to make sacrifices,” he said. “We do not know the meaning of surrender. If necessary, we will carry out massive savings. We will be even more thrifty later on.”
Prabowo also referred to outside interference in Indonesia, though he did not elaborate. Other senior Indonesian political figures have also reacted strongly to MSCI’s warning, according to Reuters.
Why MSCI warned Indonesia
MSCI, whose indexes guide trillions of dollars in global investment, said last week that it was “no longer appropriate” to classify Indonesia as an emerging market. The provider pointed to investor concerns over what it called ongoing opacity in shareholding structures, as well as coordinated trading behaviour that has affected price information.
A demotion to standalone status would cut the $1.5 trillion G20 economy off from major emerging-market index flows, Reuters reported. It could also force investment funds that track MSCI’s emerging-market indexes to sell their Indonesian holdings, AFP reported.
In an emailed reply to a request for comment, MSCI said its decisions follow transparent and rules-based methodologies. “MSCI will continue to monitor developments in the Indonesian market and engage with market participants and authorities,” it said.
Markets and the central bank’s response
The Jakarta Composite Index plunged more than 11 percent on Friday on fears of an exodus of foreign investment, its biggest single-day fall since 1998. The index closed 0.94 percent higher on Wednesday, having sunk earlier in the week to its lowest level since late 2020. It has fallen more than 40 percent since the start of the year, placing it among the world’s worst-performing indexes.
On Monday, Indonesia Stock Exchange chief Jeffrey Hendrik announced measures to improve market transparency, including publicly providing more information on small shareholders. The exchange will also remove all shares with high shareholding concentration from the composite stock price index, to provide a more reasonable picture of index movements.
Indonesia’s central bank also acted on Wednesday, keeping its benchmark interest rate unchanged at 5.75 percent, while raising its overnight deposit facility rate by 25 basis points to 5.00 percent. The bank had already raised rates by 100 basis points in three moves between May and June to defend the rupiah.
What happens next
Indonesia’s economy has been hit hard by surging fuel prices linked to the Middle East war. The country of 287 million people is a net oil importer, but the government has kept heavily subsidised fuel prices unchanged despite the high costs.
MSCI has not set a date for a final decision on Indonesia’s classification, saying only that it will keep monitoring developments. For now, Jakarta’s response rests on the transparency measures announced by the stock exchange, the central bank’s steady rate stance, and the president’s public insistence that Indonesia will not be intimidated. Further business coverage will follow as the dispute develops.
