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Effects of Foreign Exchange Supply and Demand Dynamics to Rupiah Exchange Rate and Economic Performance

Author

Listed:
  • Sugeng

    (Bank Indonesia)

  • M. Noor Nugroho

    (Bank Indonesia)

  • Ibrahim

    (Bank Indonesia)

  • Yanfitri

    (Bank Indonesia)

Abstract

This study examines the influence of forex demand and supply interaction on Rupiah's exchange rate. Estimation results show that the movement of rupiah is influenced by the forex supply and demand, where the foreign players are dominating. Furthermore, the demand and supply of foreign exchange is asymmetric. This paper also shows the impact of exchange rate movements on output is only in the short term with a more significant influence to the import, while the depreciation of Rupiah has a larger impact than its appreciation.

Suggested Citation

  • Sugeng & M. Noor Nugroho & Ibrahim & Yanfitri, 2010. "Effects of Foreign Exchange Supply and Demand Dynamics to Rupiah Exchange Rate and Economic Performance," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 12(3), pages 1-40, January.
    • Handle: RePEc:idn:journl:v:12:y:2010:i:3:p:1-40
    DOI: https://doi.org/10.21098/bemp.v12i3.374
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    Citations

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    Cited by:

    1. Dennij Mandeij, 2020. "Determination of Equilibrium Exchange Rate Rupiah Against US Dollar and its Volatility: Application of Asset Approach," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 6(6), pages 323-336.

    More about this item

    Keywords

    Foreign exchange; inflation; exchange rate;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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