Real exchange rate targeting and inflation in Indonesia: theory and empirical evidence
AbstractLooking at the period of January 1987 to July 1995, this study shows that the monetary authority in Indonesia had actively intervened the foreign exchange market to ensure the stability of rupiah real exchange rate. Strong evidences of real exchange rate targeting were even more significant during the period of January 1990-February 1993. The study also shows that the real exchange rate targeting policy in Indonesia had been inflationary, particularly during the period of January 1990-July 1995. The last finding supports the results of early studies that showed exchange rate policy which targets a faster rate of depreciation of the domestic currency contributes to a higher inflation rate.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Financial Economics.
Volume (Year): 9 (1999)
Issue (Month): 4 ()
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Web page: http://www.tandfonline.com/RAFE20
Other versions of this item:
- Reza Yamora Siregar, 1996. "Real exchange rate targeting and inflation in Indonesia: theory and empirical evidence," Pacific Basin Working Paper Series 96-07, Federal Reserve Bank of San Francisco.
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- Reza Siregar, 2011.
"The Concepts of Equilibrium Exchange Rate: A Survey of Literature,"
South East Asian Central Banks (SEACEN) Research and Training Centre, number sp81, June.
- Siregar, Reza, 2011. "The Concepts of Equilibrium Exchange Rate: A Survey of Literature," MPRA Paper 28987, University Library of Munich, Germany.
- Uma Ramakrishnan & Athanasios Vamvakidis, 2002. "Forecasting Inflation in Indonesia," IMF Working Papers 02/111, International Monetary Fund.
- Reza Siregar & Victor Pontines, 2005.
"Incidence of Speculative Attacks on Rupiah During the Pre- and Post- 1997 Financial Crisis,"
School of Economics Working Papers
2005-07, University of Adelaide, School of Economics.
- Reza Siregar & Victor Pontines, 2005. "Incidences of Speculative Attacks on Rupiah During The Pre- and Post-1997 Financial Crisis," Centre for International Economic Studies Working Papers, University of Adelaide, Centre for International Economic Studies 2005-04, University of Adelaide, Centre for International Economic Studies.
- Ramkishen S. Rajan & Reza Siregar & Iman Sugema, 2003. "Why was there a precrisis capital inflow boom in Southeast Asia?," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(3), pages 265-283.
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