Goldman Sachs analysts said Indonesia was expected to keep its MSCI Emerging Markets status despite the possibility of further index weight cuts and some stock removals as updated equity disclosure information is incorporated.

According to Jin10, MSCI recently kept Indonesia’s emerging market classification unchanged, acknowledged progress in market reforms, and delayed its final decision until November.

The analysts said uncertainty around index adjustments and a challenging economic environment could continue to weigh on investor sentiment. They added that higher interest rates help stabilize the Indonesian rupiah, but weak domestic demand, slower credit growth, and cooling retail sales could pose downside risks.

Goldman Sachs maintained an underweight rating on Indonesian equities.