Exchange Rate Volatility in Indonesia During the Covid-19 Pandemic

DOI

10.2991/978-94-6463-204-0_43How to use a DOI?

Keywords

ARCH model; ARDL-ECM; Exchange rate volatility

Abstract

Exchange rate volatility is an essential indicator of macroeconomics and the key variable of international trade. The COVID-19 pandemic has seriously impacted all economies, including Indonesia. This study reviewed the effect of exchange rate volatility on the bilateral trade performance of Indonesia-United States using data from 2001:Q1 to 2022:Q2. This study employed Autoregressive Conditional Heteroskedasticity (ARCH) to measure exchange rate volatility.

Meanwhile, the Autoregressive Distributed Lag-Error Correction Model (ARDL-ECM) was used to test the study variables’ long- and short-term relationships. The analysis shows that real exchange rate volatility did not affect Indonesian export volume. Therefore, if Indonesia wishes to maintain the trade balance, it is recommended to keep a developed and controlled exchange rate policy.

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  - Vita Kartika Sari
AU  - Dwi Prasetyani
AU  - Aulia Hapsari
PY  - 2023
DA  - 2023/10/04
TI  - Exchange Rate Volatility in Indonesia During the Covid-19 Pandemic
BT  - Proceedings of the International Conference on Economics and Business Studies (ICOEBS-22-2)
PB  - Atlantis Press
SP  - 504
EP  - 513
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-204-0_43
DO  - 10.2991/978-94-6463-204-0_43
ID  - Sari2023
ER  -