EXCHANGE RATE AND INDONESIA ECONOMIC GROWTH

Ayi Supriyadi (), Trinil Arimurti (), Yanfitri () and Sinta Atharinanda ()
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Ayi Supriyadi: Bank Indonesia, Indonesia
Trinil Arimurti: Bank Indonesia, Indonesia
Yanfitri: Bank Indonesia, Indonesia
Sinta Atharinanda: Bank Indonesia, Indonesia

Bulletin of Monetary Economics and Banking, 2025, vol. 28, issue 2, 261-292

Abstract: We examine the effect of the exchange rate on the economy and the impact of the Dominant Currency Paradigm (DCP) on Indonesia’s export volume. This study employs multiple methodologies, namely the AutoRegressive Distributed Lag (ARDL) model, the non-linear version of ARDL, and panel regressions. The findings indicated that the depreciation of the exchange rate influenced economic expansion. The beneficial effect was mitigated by the influence of finance as seen in the company’s financial sheet. The findings also indicate the influence of DCP on the volume of international trade in Indonesia.

Keywords: Exchange rate; Export; Import; Balance sheet; Dominant currency paradigm (search for similar items in EconPapers)
JEL-codes: F31 F41 F43 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:28:y:2025:i:2e:p:261-292

DOI: 10.59091/2460-9196.1932

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