Gökhan Şahin Güneş
This research note examines the potential financial effects of a loss of market classification status following the decision announced by Morgan Stanley Capital International (MSCI) on October 15, 2026, concerning Turkish equity indexes, drawing on previous cases. To this end, it compares real stock market returns and real changes in exchange rates over the year following reclassification announcements in five countries that were previously downgraded from the emerging markets category. The findings indicate that adverse market movements were more common in the short term but that the magnitude and persistence of the effects varied considerably across countries. These differences appear to reflect not only MSCI decisions but also country-specific macroeconomic conditions, exchange rate regimes, and global financial developments. For Türkiye, a potential downgrade could put pressure on equity prices, capital flows, and the exchange rate although the scale and persistence of these effects remain uncertain.
doc. ResearchBrief285
pdf. ResearchBrief285