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Licensed Unlicensed Requires Authentication Published by De Gruyter September 23, 2015

Short-Run Determinants of the IDR/USD Exchange Rate: A Simultaneous-Equation Model

  • Yu Hsing EMAIL logo
From the journal Global Economy Journal


This paper examines short-run determinants of the Indonesian rupiah/USD exchange rate based on a simultaneous-equation model. Based on a reduced form equation and the EGARCH method, the paper finds that the IDR/USD exchange rate is positively associated with the real 10-year U.S. government bond yield, real GDP in Indonesia, the stock price in the U.S. and the expected exchange rate and negatively influenced by the real deposit rate in Indonesia, real GDP in the U.S., and the stock price in Indonesia. The Asian financial crisis has shifted the mean exchange rate by 4,900.857.

JEL Classification: F31; F41


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Published Online: 2015-9-23
Published in Print: 2015-9-1

©2015 by De Gruyter

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