Indonesia scrambles to halt US$80 billion market crash as rupiah hits record low

South China Morning PostCenter-RightEN 1 min read 100% complete by ReutersJanuary 29, 2026 at 12:13 PM

AI Summary

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Indonesia is attempting to stabilize its financial markets after a significant crash that erased approximately $80 billion in market value. The crisis was triggered by MSCI concerns regarding ownership and trading transparency in Indonesian stocks, coupled with investor anxieties about President Prabowo Subianto's fiscal policies, including a widening deficit and increased state intervention. The rupiah has fallen to record lows, exacerbated by the appointment of President Subianto's nephew to the central bank, raising concerns about its independence. In response, Indonesian regulators have introduced measures, such as increasing the free-float requirement for listed firms, leading to a slight market recovery. The country is working to prevent further capital outflow and a potential market downgrade.

Key Entities & Roles

Key Player Opposition Context

United States 40% Sri Mulyani Indrawati 60% Thomas Djiwandono ×270% MSCI ×270% Prabowo Subianto ×280% Indonesia ×590%

Keywords

market crash 90% indonesian stocks 80% rupiah 70% investor confidence 70% fiscal deficit 60% financial markets 60% central bank 50% regulatory response 50% market value 40% prabowo subianto 40%