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Has Fintech Influenced Indonesia’s Exchange Rate and Inflation?

Author

Listed:
  • Seema Wati Narayan

    (RMIT University)

  • Sahminan

    (Bank Indonesia)

Abstract

The digital financial services industry, or financial technology (FinTech), has emerged in Indonesia in recent years. The FinTech industry, although disruptive, promises among other things to reduce costs of, and improve access to, financial services. This paper investigates the macroeconomic implications of FinTech companies in Indonesia over the period 1998–2017. In particular, we investigate the impact of FinTech on the Indonesian exchange rate (rupiah vis-a-vis the US dollar) and the inflation rate. Our results suggest that FinTech is able to reduce inflation and lead to a real appreciation of the rupiah against the US dollar, although its effect on the exchange rate is delayed. We explain our results and discuss future research directions.

Suggested Citation

  • Seema Wati Narayan & Sahminan, 2018. "Has Fintech Influenced Indonesia’s Exchange Rate and Inflation?," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 21(2), pages 177-190, October.
    • Handle: RePEc:idn:journl:v:21:y:2018:i:2:p:177-190
    DOI: https://doi.org/10.21098/bemp.v21i2.966
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    References listed on IDEAS

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    Cited by:

    1. Song, Lina & Li, Wenting & Yang, Yandi & Gao, Hongyu & Du, Xinqiang & Jia, Xinlin, 2024. "Understanding the impact of Fintech, and Mineral Resources on Artificial Intelligence currency: A global evidence from QARDL Approach," Resources Policy, Elsevier, vol. 95(C).
    2. Rizky Yudaruddin & Bramantyo Adi Nugroho & Mardiany & Zhikry Fitrian & Pebiansyah Hapsari & Yuli Fitrianto & Eka Nor Santi, 2024. "Liquidity and Credit Risk in Indonesia: The Role of FinTech Development," SAGE Open, , vol. 14(2), pages 21582440241, May.

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    Keywords

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    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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