The Determinants of Foreign Exchange Reserves: Evidence from Indonesia

Andriyani, Kurnia; Marwa, Taufiq; Adnan, Nazeli; Muizzuddin, Muizzuddin

doi:10.13106/jafeb.2020.vol7.no11.629

Cited by 16 publications

(16 citation statements)

References 7 publications

(8 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The relationship between the exchange rate and foreign exchange reserves is similar to several theories, as evidenced by research from Sayoga & Tan (2017) and Andriyani et al (2020), who discovered that the exchange rate had a negative and significant effect on Indonesia's foreign exchange reserves. Furthermore, this study contradicts research from (Kaligis 2017), which discovered that the exchange rate has a positive and significant effect on Indonesia's foreign exchange reserves.…”

Section: Resultssupporting

confidence: 76%

Halal Tourism and Foreign Exchange Reserves in Indonesia: Error Correction Model

Layali

Suriani

2022

Etikonomi

View full text Add to dashboard Cite

This study aims to look at how the number of tourists and the exchange rate affects Indonesia's foreign exchange reserves before and after the implementation of halal tourism from 2010 to 2019 (monthly). The Paired t-Test model was used to look at the differences in Indonesia before and after halal tourism. By examining the short and long-term effects of tourist numbers and currency rates on foreign exchange reserves using the Error Correction Model. Halal tourism, according to the research, helps Indonesia's foreign exchange reserves. The exchange rate has a negative impact on foreign exchange reserves in this situation. Meanwhile, the number of international visitors has a favourable impact on both short- and long-term foreign exchange reserves. It demonstrates that the tourism sector, particularly halal tourism, can be one of the supporting sectors in increasing the country's foreign exchange, encouraging the government to implement policies to support its tourism industry.How to Cite:Rahmatun, L., & Suriani. (2022). Halal Tourism and Foreign Exchange Reserves in Indonesia: Erroc Correction Model. Etikonomi, 21(1), 177-192. https://doi.org/10.15408/etk.v21i1.19616.

show abstract

Section: Resultssupporting

confidence: 76%

Halal Tourism and Foreign Exchange Reserves in Indonesia: Error Correction Model

Layali

Suriani

2022

Etikonomi

View full text Add to dashboard Cite

show abstract

“…The positive effect indicates that increasing exports (selling items to foreign nations) will boost Indonesia's state income in foreign currency, which will then be held as foreign exchange reserves. This study supports the findings of Andriyani et al (2020) and Indriany et al (2021), all of which found that exports have a positive and significant impact on Indonesia's foreign exchange reserves. This could imply that Indonesia should pay attention to factors that have a positive impact on foreign exchange reserves, such as exports, taxes, and capital inflows, as well as limit imports of items that can be produced domestically.…”

Section: Vecm Model Regressionsupporting

confidence: 90%

“…The payment of maturing government foreign debt and attempts to stabilize currency rates amidst global financial market turmoil produced a drop in foreign exchange reserves in 2018. Exports and foreign debt have a positive and considerable effect on foreign exchange reserves, according to Antoni et al (2019) and Andriyani et al (2020). The increase or decrease in foreign exchange reserves is sometimes not in line with the increase or decrease in exports and imports.…”

Section: Introductionmentioning

confidence: 98%

The Impact of Macroeconomic Indicators on Indonesia’s Foreign Exchange Reserve Position

Rahmawati

Suriani²

2022

JEP

View full text Add to dashboard Cite

A country’s foreign exchange reserves are its foreign currency savings that can be utilized to finance international transactions. The purpose of this study is to determine how macroeconomic indicators (exports, imports, exchange rates, inflation rates, and foreign debt) influence Indonesia’s foreign currency reserves. The researchers used secondary data in the form of monthly time series, as well as quantitative analysis using multiple linear regression. The model that was used was the Vector Error Correction Model (VECM). According to the research, future exports and external debt have a positive impact on Indonesia’s foreign exchange reserves. Indonesia’s foreign exchange reserves are negatively impacted by imports and predicted inflation rates, whereas the rupiah exchange rate has no effect. In the model, there is a short-run to long-run equilibrium relationship. The IRF results show that shocks from other independent variables have little effect on foreign exchange reserves and that the foreign exchange reserves variable contributes the most to the shocks that occur

show abstract

“…Jena and Sethi (2020) employing ARDL-ECM with data of 1960-2018 concluded that current account balance, domestic credit of private sector, exchange rate, per capital GDP, inflation, real interest rate are long-run determinants of foreign exchange reserve in Brazil. A similar approach applied by Andriyani, et al (2020) in the case of Indonesia over the period of January 2016 to December 2018 reported that foreign debt, inflation, export, and exchange rate affect the foreign exchange reserve.…”

Section: Research Limitationsmentioning

confidence: 97%

Determinants of Nepal's Foreign Exchange Reserve: An Empirical Study

Gajurel

2022

JOM

View full text Add to dashboard Cite

With the intent to fill the gaps in the empirical literature on foreign exchange reserve in Nepal, the paper aims to evaluate the empirical evidence of determinants of foreign exchange reserve in Nepal and to investigate the dynamic relationship among variables of interest using an autoregressive distributed lag (ARDL) error correction model and impulse response functions (IRFs) with 40 years of data from the period 1980-2020. The stylized facts of the employed model in the short run, reveal that the previous year's foreign exchange reserve itself, and all other predictors except gross fixed capital formation and official exchange rate (have negative) have a positive effect on foreign exchange reserve. The empirical evidence also insights that net flows of foreign direct investment, GDP per capita, inflation, and official exchange rate have positively influenced the foreign exchange reserve in long run. On the contrary, gross fixed capital formation has negative effects in long run. Moreover, anticipated crucial proxies––current account balance and trade are positively influenced but not significant. However, any impulse on the current account balance reports a significant response of foreign exchange. Thus, the central bank of Nepal and policymakers are needed to focus on the productivity of gross fixed capital formation or domestic investment to maintain the reserve adequacy and should give their attention to the current account balance (import and export) that can maintain the foreign exchange reserve and financial/economic stability and safety.

show abstract

The Determinants of Foreign Exchange Reserves: Evidence from Indonesia

Cited by 16 publications

References 7 publications

Halal Tourism and Foreign Exchange Reserves in Indonesia: Error Correction Model

Halal Tourism and Foreign Exchange Reserves in Indonesia: Error Correction Model

The Impact of Macroeconomic Indicators on Indonesia’s Foreign Exchange Reserve Position

Determinants of Nepal's Foreign Exchange Reserve: An Empirical Study

Contact Info

Product

Resources

About