Exchange Rate Volatility Determinant in Indonesia and Malaysia
Journal Title: Journal of Economics, Finance and Management Studies - Year 2023, Vol 6, Issue 04
Abstract
In the case of Indonesia and Malaysia, the positive and significant correlation between real effective exchange rate (REER) and capital and financial account explain that when capital inflows augment to domestic, then REER is more volatile. This result enhances IMF study (2006) show that capital inflow on ASEAN countries is dominated by short-term capital than long-term capital. In addition, the positive and significant correlation between REER and exchange rates regime indicates that when exchange rate regime becomes more flexible, then REER becomes volatile. We can analyze in the shifting of fixed exchange rate and managed floating exchange rate then to floating exchange rate. The negative and significant correlation between REER and interest rate on national currency market in Indonesia indicates this result is appropriate with Frenkel (1981) and Blanchard-Cohen (2007) empirical studies. In the case of Malaysia, this relationship is still significantly positive.
Authors and Affiliations
AD Tombolotutu, MA Djirimu, Nudhiatulhuda Mangun
Keywords
Related Articles
- EP ID EP727022
- DOI 10.47191/jefms/v6-i4-43
- Views 52
- Downloads 0
Insurance Sub-Sector Development: An Emerging Pillar For Economic Growth and Sustainability in Nigeria
This study examined the effect of Insurance sub-sector development on economic growth and sustainability in Nigeria. It specifically examined the impact of insurance premium on economic growth in Nigeria, ascertain the...
The Effect of Company Characteristics and Audit Committee Composition on Earning Management: Empirical Study of Indonesian Companies in the Food and Beverages Sector
The purpose of this research was to analyze the effect of Financial Leverage, Sales Growth, Firm Size, and Audit Committee Composition on earnings management in the Food and Beverages sub-sector in Indonesia, an empirica...
Exploring the Symmetric and Asymmetric Effect of Fuel Subsidy Removal on the Income Per Capita in Nigeria
This study makes unique contributions by exploring the investigation of the linear and non-linear effects of fuel subsidy removal on the per capita income of individuals in Nigeria. This gap serves as the motivation for...
Does Digital Payment Shift the People's Shopping Behaviour? Evidence in Yogyakarta
Digitization has become something that is inherent in people shopping habits. This study proposed and tries to investigate whether the Industrial Revolution 4.0 has dominated people's shopping behaviour to electronic sho...
Procyclicality of the Financial Systems in Emerging Economies
This research aimed at examining the procyclicality of financial systems in emerging economies, with a particular focus on the role of loan loss provisions. In total, 318 articles were initially retrieved, which after ap...