MSCI Warning Shakes Indonesia's Markets—Central Bank Says Damage Is Temporary

Indonesia's central bank says the recent market sell-off tied to MSCI's reclassification proposal will not last. Bank Indonesia (BI) reported that capital outflows followed MSCI's plan to review Indonesia's stock market status, but the bank expects the impact to be short-lived. MSCI, a global index provider, proposed reclassifying Indonesia's stock market. The move prompted investors to pull money out of Indonesian assets. BI responded by stating that the outflows are temporary and that market conditions remain stable. The central bank continues to monitor the situation and stands ready to maintain financial stability.