The Effect Of The Financial Crisis On Export Competitiveness In Indonesia

Abstract

The study aims to investigate inflation and exports, and interest rates with a research period from 1990 to 2021. VECM (Vector Error Correction Model) is the analytical technique have been used to ascertain the vector causality link between variables. Utilized secondary data in this investigation. Obtained using official World Bank statistics. We discovered that strengthening the rupiah currency rate is only marginally positively impacted by increasing competition in Indonesian exports. However, inflation in Indonesia significantly depresses the currency exchange rate which has a pressing upon suppressing how much exports can value. This is because the rupiah exchange rate significantly boosts exports. When inflation depresses the value of the rupiah, it has a great effect on its suppression in terms of the rupiah exchange rate which continues to suppress Indonesia's export competitiveness.