DBS Group senior economist Radhika Rao said MSCI's proposal to remove Indonesia from the emerging-markets index could have a larger negative impact than a simple reclassification, as passive funds with mandate limits may cut exposure. If ensuing risk-off flows trigger currency volatility, Bank Indonesia may heighten vigilance and increase FX-market intervention.

2026-10-16

DBS Group senior economist Radhika Rao said MSCI's proposal to remove Indonesia from the emerging-markets index could have a larger negative impact than a simple reclassification, as passive funds with mandate limits may cut exposure. If ensuing risk-off flows trigger currency volatility, Bank Indonesia may heighten vigilance and increase FX-market intervention.