Determinants of Macroeconomic Effects on the Stability of Indonesia’s Foreign Exchange Reserve

DOI

10.2991/978-94-6463-204-0_33How to use a DOI?

Keywords

Foreign Exchange Reserves; Export; Import; Exchange Rates; Interest Rates; Inflation; Foreign Direct Investment

Abstract

This research aimed to analyze and test the effect of exports, imports, rupiah exchange rates to the dollar, interest rates, inflation, and investment on the stability or state of Indonesia’s foreign exchange reserve. This examination resorts to quantitative methods with the ECM (Error Correction Model) analysis method using the Eviews 9 data processing application. The data from 1997–2021 was sourced from the Statistics Agency and the Central Bank of Indonesia. The calculation of this study using an alpha of 0.05 or 5% is that exports, in the short term, have a positive and significant consequence on Indonesia’s foreign exchange reserve. However, in the long term, exports have a positive but insignificant effect on Indonesia’s foreign exchange reserve. In the short term, Imports have a negative and insignificant effect on Indonesia’s foreign exchange reserve. In contrast, imports have a positive and insignificant effect on Indonesia’s foreign exchange reserve in the long term. The rupiah exchange rate, both in the short- and long-term, has a positive and significant effect on Indonesia’s foreign exchange reserve. Interest rates, both short-term and long-term, have a negative and significant effect on Indonesia’s foreign exchange reserve. Inflation in the short term has a positive and significant effect on Indonesia’s foreign exchange reserve. However, in the long term, inflation negatively and significantly affects Indonesia’s foreign exchange reserve. Short- and long-term foreign investment boosts Indonesia’s foreign exchange reserves.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Nurus Sa’adah
AU  - Sitti Retno Faridatussalam
PY  - 2023
DA  - 2023/10/04
TI  - Determinants of Macroeconomic Effects on the Stability of Indonesia’s Foreign Exchange Reserve
BT  - Proceedings of the International Conference on Economics and Business Studies (ICOEBS-22-2)
PB  - Atlantis Press
SP  - 389
EP  - 400
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-204-0_33
DO  - 10.2991/978-94-6463-204-0_33
ID  - Sa’adah2023
ER  -