Jakarta, Oct. 30 -- The impact of MSCI's proposal to reclassify Indonesia's stock market, which triggered recent capital outflows, is likely to be short-lived, Bank Indonesia (BI) Governor Destry Damayanti said on Thursday.

Speaking at the Kadin National Leadership Meeting in Jakarta, Damayanti said efforts by market regulators to improve governance could help restore foreign investor confidence over the long term.

"I am confident that we have significant opportunities in the long term. We see the impact of MSCI's announcement as a short-term shock. And we hope that once the issues of concern have been addressed, investor sentiment will be able to recover," she said.

Damayanti noted that Indonesia's economic fundamentals remain strong,...