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Morning Edition · Sunday, November 8, 2026Published at 12:20 AM EST · New York
Prabowo's Brother Says MSCI Went Too Far in Threatening to Remove Indonesia From Emerging-Market Indexes
Hashim Djojohadikusumo warned that removal would have serious consequences, after he said in October that the rupiah could weaken to between 21,000 and 22,000 per dollar.
Indonesia's government is pushing back against the index provider whose classification decides where passive funds invest. Hashim Djojohadikusumo, a tycoon, presidential envoy and brother of President Prabowo Subianto, told the Financial Times that MSCI's downgrade threat "went too far". He said removing Indonesia from global indexes would have "serious consequences."
In October, MSCI opened a consultation on reclassifying Indonesia as a standalone market. That classification would remove Indonesia from the main emerging-market index tracked by many funds. MSCI cited opaque ownership structures, concentrated shareholdings and suspected coordinated trading. It said investor feedback suggested that a move to frontier status would not adequately address the access problems. A decision is due in the November review.
Hashim has given the starkest warnings himself. On Oct. 29, he said the rupiah could weaken to as much as 21,000 to 22,000 per dollar if MSCI's concerns go unaddressed, and he did not explain how he reached the figure. At the time, Reuters put the currency near 18,100, close to a record low. He also called for an end to the coordinated share-price manipulation that Indonesians call "saham gorengan," or "fried stocks."
Fiscal policy is moving the other way. Antara, the state news agency, reports that the government has allocated Rp883 billion, about $48.7 million, for year-end transportation discounts. The program is small, but it continues a pattern of spending to support consumption while the currency is weak and foreign investors are questioning governance.
Veracity: Plausible
72/100- If true, who benefits
The "went too far" framing shifts blame for weak market governance onto a foreign index provider, which helps the presidential family. Foreign funds that track MSCI gain leverage to demand free-float and ownership rules.
- The nuance
In February, Hashim himself said MSCI had sent four warning letters that domestic regulators never passed to the president, so the threat came after months of warnings. His forecast of 22,000 rupiah per dollar is his own figure with no published method, and the "went too far" quote appears only in the Financial Times report.
An open-source-intelligence read of how likely this story is true with its real nuance, not a judgment of any outlet. It assesses the claim, weighing independent and adversarial reporting. How we label confidence.
What this means
The pressure works through passive fund flows. A standalone classification forces index-tracking funds to sell, and that selling weakens the rupiah and raises Indonesia's cost of servicing its foreign debt, which is the link Hashim himself described. Indonesian banks and large-cap stocks, foreign holders of local bonds, and Bank Indonesia's reserves are most exposed. The precedents are Argentina, which MSCI moved to standalone in 2021, and Pakistan, which was moved to frontier the same year. Both moves followed years of warnings, and neither country regained its earlier status quickly. The consensus may give too much weight to public pressure from the presidential family. MSCI's leverage comes from the funds that track its indexes, and those funds care about free float and ownership disclosure, not political statements. The desk's read is that Jakarta announces free-float, disclosure and anti-manipulation rules before the decision in an effort to delay it, and that MSCI either postpones or proceeds, depending on whether the rules are enforceable. MSCI going ahead despite new rules would prove the delay strategy has failed and would put the rupiah under further selling pressure.
Synthesized from: Financial Times World · Antara
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