JAKARTA (Oct 19): Indonesia's stock market operator halved the daily down limit on stock prices on Monday as authorities try to put the brakes on the market's heaviest-ever sell-off, unleashed by MSCI looking to cut Indonesia from its suite of investable indices.

The Indonesia Stock Exchange lowered the down limit for stocks to 7% from 15%, effective from Monday until Dec 31.

The move matters because it slows selling in a market in free fall.

Selling was triggered when index provider MSCI said last Friday Indonesia was no longer worthy of "emerging market" status and proposed a downgrade to "stand-alone", which would exclude it from MSCI's global emerging and frontier indices.

A two-day fall of 16% is the steepest such sell-off for the Jakarta Composite benchmark on LSEG records stretching back to 1990, and heavier than falls through the Asian financial crisis of 1998.

A down limit of one rupiah applies to stocks worth below 10 rupiah apiece.

Sell orders below limit-down prices are automatically rejected by the bourse's trading system.

The move was made "to ensure orderly, fair, and efficient securities trading, as well as to mitigate market volatility", the exchange said in a statement.

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