Prabowo Defies MSCI Downgrade Threat, Accuses Index Provider of Intimidation
President Prabowo Subianto rejects MSCI's threat to reclassify Indonesian stocks as a standalone market, vowing the nation will not buckle under pressure.
POLICY WIRE — Jakarta, Indonesia — President Prabowo Subianto has launched a sharp critique against global index provider MSCI, accusing the firm of attempting to intimidate his nation following a warning that could lead to a significant downgrade of Indonesian equities.
During a cabinet meeting held on Wednesday, the President adopted a defiant stance, declaring that Indonesia would not be frightened or coerced by the potential reclassification of its stock market to standalone status.
The tension follows a warning issued by MSCI last week, which triggered a record-breaking market rout and sent Indonesian stocks tumbling to a six-year low. The threat of expulsion from key indices has severely rattled investor sentiment across the region.
In an effort to secure an eleventh-hour reprieve, members of President Prabowo’s team held discussions with MSCI officials on Monday, October 19. Despite these diplomatic efforts, the administration remains under significant economic pressure.
The MSCI warning represents the latest in a series of financial challenges for the current government. Earlier this year, both Moody’s and Fitch downgraded their sovereign rating outlooks for Indonesia to negative.
Critics have drawn parallels between the current market instability and the 1997 Asian financial crisis, when a sharp devaluation of the rupiah prompted a massive flight of global capital. President Prabowo, however, remains steadfast in his refusal to buckle under the current external pressure.
Reporting by Policy-Wire (PW)
