Exchange Rate Policy and Reserve Management in Indonesia in the Context of East Asian Monetary Regionalism
The first part of this paper examines the behaviour of rupiah over the last eight years (1995 - 2003) to ascertain whether in fact there is specific evidence of a return to de facto US dollar peg in Indonesia. While we fail to find strong evidence to suggest Indonesia has reverted to the extent of dollar pegging that was undertaken pre-crisis, there are indications that the fluctuations of the US dollar have increasingly influenced the movements of rupiah, especially since 2000. Given the apparent gradual tendency towards a Â“hardeningÂ” of the exchange rate, there is consequently an increasing need to maintain a sizeable level of international reserves to support the peg. The next question that arises naturally from this is whether there is any way in which the benefits from holding reserves may be obtained without the need for Indonesia to continue to accumulate them. This is where a regional reserve pooling arrangement becomes relevant. But how might one judge the potential size of benefits of reserve pooling? This is the focus of the second part of the paper.
|Date of creation:||Aug 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (+ 61 8) 8303 5672
Fax: (+ 61 8) 8223 1460
Web page: http://www.adelaide.edu.au/cies/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barry J. Eichengreen & Donald J. Mathieson, 2000. "The Currency Composition of Foreign Exchange Reserves; Retrospect and Prospect," IMF Working Papers 00/131, International Monetary Fund.
- Graham Bird & Ramkishen Rajan, 2002.
"Too Much of a Good Thing?: The Adequacy of International Reserves in the Aftermath of Crises,"
Centre for International Economic Studies Working Papers
2002-10, University of Adelaide, Centre for International Economic Studies.
- Graham Bird & Ramkishen Rajan, 2003. "Too Much of a Good Thing? The Adequacy of International Reserves in the Aftermath of Crises," The World Economy, Wiley Blackwell, vol. 26(6), pages 873-891, 06.
- Graham Bird & Ramkishen Rajan, 2002. "The Evolving Asian Financial Architecture," Centre for International Economic Studies Working Papers 2002-03, University of Adelaide, Centre for International Economic Studies.
- Colin Johnson, 1998. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 34(2), pages 3-59.
- Tony Cavoli & Ramkishen Rajan, 2003. "Designing Appropriate Exchange Rate Regimes for East Asia: Inflation Targeting and Monetary Policy Rules," Centre for International Economic Studies Working Papers 2003-09, University of Adelaide, Centre for International Economic Studies.
When requesting a correction, please mention this item's handle: RePEc:adl:cieswp:2004-03. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dmitriy Kvasov)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.