MSCI postponed the decision to downgrade the rating, providing Indonesia with a breathing space.

Index provider MSCI announced a delay in a decision to possibly downgrade Indonesia's rating, allowing the country to temporarily maintain its status as an emerging market. This provides a much-needed relief for the Indonesian market, which has been struggling to regain investor confidence. Analysts had previously warned that a downgrade to a frontier market could lead to capital outflows of billions of dollars from Indonesia. MSCI stated in its assessment that they will continue to evaluate recent transparency reforms announced by Indonesia's market regulators to address international investor concerns about the country's opaque equity structure and suspected collusion issues. If sufficient progress is not made before MSCI's index evaluation in November, Indonesia may lose its status as an emerging market, a position it has held since 1989. Concerns about transparency and policy-making have severely impacted Indonesian assets this year, prompting credit rating agencies, MSCI, and another index provider, FTSE Russell, to issue consecutive warnings. The pressure from the Iran crisis has exacerbated the situation, affecting the oil-sensitive Indonesian rupiah and increasing fiscal risks as government subsidies expand. So far this year, the Indonesian rupiah has been the worst-performing major currency in Asia, and the country's stock market has also been the weakest in the region.