Indonesia’s stock market is in freefall, and it’s dragging the country’s currency down with it. The Jakarta Composite Index has plunged roughly 37% from its 2026 peak, earning the unwanted distinction of being the worst-performing major global equity index, according to Bloomberg.
The Indonesian rupiah, meanwhile, has weakened more than 7% against the US dollar, briefly trading above 17,500-17,700 per USD. That’s an all-time low. Global investors aren’t just trimming positions. They’re heading for the exits.
A market rout months in the making
The sell-off didn’t appear overnight. It’s the culmination of a brutal stretch that started gaining momentum in late January 2026, when MSCI flagged potential downgrades of Indonesian equities due to ownership concentration and low free-float issues. That single warning triggered an 8% decline that erased approximately $80 billion in market value in a matter of days.
Adding fuel to the fire, six companies were removed from the MSCI index during a January rebalance. For emerging market funds that track MSCI benchmarks, this forced selling at exactly the worst time.
