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The Impact Of Crude Palm Oil Price On Rupiah’S Rate

Author

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  • Hilda Aprina

Abstract

Indonesia is a largest producer of Crude Palm Oil in the world, with increasing production and export from time to time. Since Indonesia now adopts a floating exchange rate regime, the export of such commodity may influence the real exchange rate, and this is the aim of this paper. By applying simultaneous equation model on data from 1984 to 2011, we conclude that the increase in CPO price will lead to an appreciation of Rupiah’s real exchange rate. As a major producer of CPO, the authority should be able to control the world price of crude palm oil to help controlling the stability of Rupiah’s rate.

Suggested Citation

  • Hilda Aprina, 2014. "The Impact Of Crude Palm Oil Price On Rupiah’S Rate," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 16(4), pages 1-20, April.
    • Handle: RePEc:idn:journl:v:16:y:2014:i:4g:p:1-20
    DOI: https://doi.org/10.21098/bemp.v16i4.448
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    Citations

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    Cited by:

    1. Sharma, Susan Sunila & Phan, Dinh Hoang Bach & Iyke, Bernard, 2019. "Do oil prices predict Indonesian macroeconomy?," Economic Modelling, Elsevier, vol. 82(C), pages 2-12.
    2. Shamaila Butt & Suresh Ramakrishnan & Nanthakumar Loganathan & Muhammad Ali Chohan, 2020. "Evaluating the exchange rate and commodity price nexus in Malaysia: evidence from the threshold cointegration approach," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-19, December.
    3. Narayan, Paresh Kumar & Phan, Dinh Hoang Bach & Sharma, Susan Sunila, 2019. "Does Islamic stock sensitivity to oil prices have economic significance?," Pacific-Basin Finance Journal, Elsevier, vol. 53(C), pages 497-512.

    More about this item

    Keywords

    CPO; simultaneous equation; real exchange rate.;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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