Determining the Exchange Rate: Purchasing Power Parity - PPP

Bangun Widoyoko, Ely Siswanto and F. Danardana Murwani
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Bangun Widoyoko: Universitas Negeri Malang, Indonesia
Ely Siswanto: Universitas Negeri Malang, Indonesia
F. Danardana Murwani: Universitas Negeri Malang, Indonesia

Expert Journal of Finance, 2018, vol. 6, issue 1, 12-15

Abstract: This study aimed to examine the effect of inflation on the issue of exchange rate determination of the forward exchange rate on the exchange rate of RMB (Renminbi) to Rupiah. Inflation has been chosen as an independent variable because of its close relation to PPP (purchasing power parity) theory. Analyses in this research have used logistic analysis with time series data. The data that has been used include exchange rate data with the period 2007-2017 with a sample size of 132 data. The results of this study have shown that inflation is effective in determining the exchange rate.

JEL-codes: F31 F37 G17 (search for similar items in EconPapers)
Date: 2018
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