Capital Economics: Indonesia's Status as an Emerging Market Remains at Risk

Deep News06-29 12:20

Economists from Capital Economics have indicated in a report that Indonesia faces the risk of being downgraded from its current emerging market status to a frontier market if significant progress is not made in addressing MSCI's concerns regarding transparency. The index provider recently postponed its decision on Indonesia's classification until November.

The economists noted that MSCI appears to be allowing more time to assess the impact of reforms introduced by financial regulators to tackle its concerns, rather than proceeding with an immediate downgrade. Numerous issues, such as granting greater market access to foreign investors, still require resolution before the November deadline.

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