EMERGING MARKETS-Indonesian stocks extend rout on fears of MSCI index exclusion

Oct 19 (Reuters) - Indonesian equities extended their losses to a six-year low on Monday as investors remained rattled by MSCI's warning last week that it could remove the market from a suite of indexes tracked by global funds, while the rupiah weakened marginally.

The Jakarta Composite Index .JKSE dropped more than 5% in early trade to its lowest level since October 2020, following a nearly 12% plunge on Friday in its worst single-day decline in decades.

It is the world's worst-performing major equity index this year, down more than 40%.

In a surprise move on Friday, MSCI said it would place Indonesia on a path to "standalone market" status, a steeper downgrade than the previously flagged "frontier market" classification.

Such a move would exclude Indonesian stocks from indexes tracked by global funds, potentially triggering billions of dollars in capital outflows.

Ahead of Bank Indonesia's policy meeting later this week, the rupiah weakened to 18,040 per dollar. Further depreciation could force policymakers to raise interest rates.

Bank Indonesia raised rates by a cumulative 100 basis points in three moves in May and June to defend the rupiah as it slid to record lows against the dollar.

Most stock markets in Emerging Asia slipped, with Taiwan shares .TWII falling 2% to their weakest point in more than one month.

The Philippine benchmark index .PSI was an outlier, with the highest intraday gain of 0.8% to a three-week high.