Indonesia Still Faces Risk of MSCI Downgrade to Frontier Market

Capital Economics economists said Indonesia still risked being downgraded from emerging-market status to frontier-market status if it did not make clear progress in addressing MSCI’s transparency concerns. According to Jin10, the economists said MSCI recently delayed its decision on Indonesia’s classification until November. They said MSCI did not appear to be moving toward an immediate downgrade, instead allowing more time to assess the impact of reforms introduced by financial regulators to address the index provider’s concerns. The economists added that several issues, including granting foreign investors greater market access, still needed to be resolved before November.