Jakarta. Indonesia’s government has moved to reassure investors that the country’s capital markets will continue to function smoothly after a wave of high-profile resignations at the financial regulator and the stock exchange, following one of the most volatile weeks in the market’s recent history.

“The President has instructed the Ministry of Finance, together with the leadership of the OJK and the Indonesia Stock Exchange, to ensure that all exchange operations continue to run normally under transitional leadership,” Chief Economic Affairs Minister Airlangga Hartarto said at an impromptu press conference at Wisma Danantara in Jakarta on Saturday.

Airlangga said the interim leadership arrangements would not disrupt the core functions of the capital market or undermine investor confidence. He stressed there would be no leadership vacuum in either financial sector supervision or market operations, with acting officials appointed to ensure continuity in decision-making.

“The interim officials will ensure that all regulatory functions, trading activities, and supervisory duties continue without disruption,” he said.

Airlangga also warned that the government would not tolerate speculative practices that distort the market, particularly stock price manipulation.

“Market manipulation does not only affect share prices and investor interests but also undermines confidence in the national financial system and hampers foreign direct investment,” he said.

Such practices, he added, disproportionately hurt investors — especially retail investors — because share prices no longer reflect companies’ fundamental value but are instead driven by the interests of a small group of market players. Beyond direct losses, he said, manipulation damages the credibility and integrity of Indonesia’s capital market.

“The government will not tolerate manipulative share pricing that harms investors and damages the credibility and integrity of the capital market,” Airlangga said.

The reassurances come after Indonesia’s benchmark Jakarta Composite Index (JCI) endured a sharp sell-off during the Jan. 26–30 period, sliding 6.94% week-on-week to close at 8,329.61, down from 8,951.01 the previous week, according to Indonesia Stock Exchange data. Market capitalization fell 7.37% to Rp 15,046 trillion ($894 billion), from Rp 16,244 trillion a week earlier.

Market volatility peaked midweek. On Wednesday, Jan. 28, the JCI plunged as much as 8% intraday, prompting the exchange to halt trading to stabilize conditions temporarily. A day later, the IDX imposed two additional trading halts after the index again dropped sharply.

The sell-off was triggered by an announcement from MSCI Inc., the global index provider, which introduced interim measures related to its assessment of the free float of Indonesian-listed companies. The move unsettled investor sentiment and sparked heavy selling across the market.

In its assessment, MSCI said that despite minor improvements to the IDX’s free-float data feed, fundamental investability risks remain. These include the potential for coordinated trading behavior that could impair price formation and amplify volatility. MSCI called for more transparent and reliable ownership data, including possible monitoring of excessively concentrated shareholdings, to support a more robust evaluation of free float and investability.

As an interim measure, MSCI said it would freeze several index-related changes for Indonesian securities with immediate effect. The freeze covers upcoming index reviews, including the February 2026 rebalancing, and is intended to reduce index turnover and investability risks while giving market authorities time to deliver what it described as “meaningful transparency improvements.”

MSCI warned that if progress is insufficient by May 2026, it would reassess Indonesia’s market accessibility status. Subject to further consultation, that review could result in a reduction of Indonesia’s weight in MSCI Emerging Markets indexes or, in a more severe scenario, a potential reclassification from Emerging Market to Frontier Market.

The market shock quickly translated into an unprecedented leadership shake-up. On Friday morning, Jan. 30, IDX President Director Iman Rachman announced his resignation, citing responsibility for recent capital market conditions. Later that evening, OJK Chairman Mahendra Siregar also stepped down, along with two senior officials overseeing capital markets supervision: Inarno Djajadi and I.B. Aditya Jayaantara. OJK Vice Chairman Mirza Adityaswara subsequently tendered his resignation.

In response, the OJK appointed interim members of its board of commissioners to ensure leadership continuity and maintain smooth regulation and supervision of the financial sector. The decisions were taken at a board meeting in Jakarta on Friday.

Under the appointments, Friderica Widyasari Dewi, previously chief executive overseeing market conduct, consumer education and protection, was named interim commissioner, assuming responsibilities vacated by both the chairman and vice chairman. Hasan Fawzi, who heads supervision of financial technology innovation, digital financial assets and crypto assets, was appointed interim commissioner, replacing the chief executive in charge of capital markets, derivatives finance and the carbon exchange.

Airlangga said the government remains confident in the resilience of Indonesia’s financial institutions, adding that the market’s underlying foundations remain strong despite global headwinds.