MSCI, a leading provider of global equity indices, announced on June 24, 2026, that it will keep South Korea classified as an emerging market, dashing hopes for an upgrade to developed market status. The decision was part of MSCI's annual market classification review.
South Korea had been under consideration for inclusion on MSCI's watchlist for a potential upgrade to developed market status, but the index provider cited ongoing concerns about market accessibility, including issues related to foreign exchange market reforms and the availability of offshore trading. The delay means South Korea will remain in the emerging market category for at least another year.
Separately, MSCI postponed its review of Indonesia's market classification, which had been under scrutiny for a potential downgrade from emerging to standalone market status. The delay was attributed to the need for further assessment of recent regulatory changes and market conditions. Indonesia has been working to improve market liquidity and transparency to avoid a downgrade.
Analysts noted that the decisions reflect MSCI's cautious approach to market reclassifications, particularly amid global economic uncertainties. The outcomes were closely watched by investors, as index reclassifications can trigger significant capital flows.
