The potential MSCI reclassification of Indonesia to standalone status threatens passive outflows, already accelerating amid $5bn of foreign exits and a 7% rupiah slide. Negative ratings-agency outlooks, weak governance and rising inflation compound the deterioration. The news signals eroding emerging-market risk appetite, pressuring regional Asian equities and currencies, while rate-hike bets build.
AI Insight · NCCOGOLD2USD/USDTAI Insight
▼ Bearish
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Indonesia is South-East Asia's biggest economy. Until recently, it was an investor darling. But now, global index provider MSCI plans to downgrade its stock indices from emerging economy to 'Standalone' — a category occupied by the likes of Zimbabwe. How did it come to this?