TEMPO.CO, Jakarta - Morgan Stanley Capital International (MSCI) gave a negative assessment of Indonesia's liberalization of its foreign exchange market, the same as in the previous review. This is explicitly stated in the 2026 Global Market Accessibility Review. The liberalization of the foreign exchange market is one of the aspects evaluated by the institution concerning the ease of capital inflow and outflow.
"There is no efficient offshore foreign exchange market, and constraints remain in Indonesia's domestic foreign exchange market," wrote MSCI in their report released on Friday, June 19, 2026.
MSCI assessed five criteria overall: openness to foreign investors, ease of capital inflow and outflow, efficiency of the operational framework, availability of investment instruments, and stability of the institutional framework. MSCI has given a negative assessment of the operational framework's efficiency with regard to information flow. This rating has decreased compared to the previous year.
According to the Economist from Paramadina University, Wijayanto Samirin, MSCI's concerns are a response to Bank Indonesia's (BI) increasingly restrictive foreign exchange transaction policy. Most recently, BI has tightened the purchase of foreign exchange transactions without underlying documents to US$10,000 per participant per month, to strengthen the rupiah exchange rate. This policy will be effective from July 1, 2026.
Since the beginning of the year, BI has continuously tightened the foreign exchange purchase threshold from US$100,000 to US$50,000, then to US$25,000. "This policy keeps changing, three times just this year, and it becomes increasingly restrictive. Furthermore, policies related to export proceeds also background MSCI's concerns," said Wijayanto when reached on Friday, June 19, 2026.
Wijayanto also emphasizes that the central bank's policies lead to exchange controls, a characteristic of frontier markets. He is concerned that when a country's market is not connected to the global market, its investment suitability decreases.
Furthermore, he argues that many recent Indonesian policies are unfriendly to the market and to investors. "If we don't change the mindset, then our capital market and money market will slowly die, becoming a 'zombie' market. It looks alive, but in reality, it is dead and has no economic role," he said.
Read: MSCI Downgrades Indonesia's Information Flow Rating to Negative
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