The Analysis of Monetary Policy Transmission Mechanism by Exchange Rate Channel in Influencing The Inflation in Indonesia

Pulungan, Putry Sari Rahmadyah and , Fitrawaty and Ayu, Sri Fajar (2019) The Analysis of Monetary Policy Transmission Mechanism by Exchange Rate Channel in Influencing The Inflation in Indonesia. In: Proceedings of The 4th Annual International Seminar on Transformative Education and Educational Leadership (AISTEEL), 23 – 24 September 2019, Garuda Plaza Hotel, Medan,.

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Abstract

This study aims to find out the effectiveness of monetary policy transmission on exchange rate pass-through in Indonesia for period 2004.1 – 2018.4. The variables consist of this study such as Exchange Rate, Net Exports, a difference of BI Rate and The Fed Rate, Foreign exchange reserves and Inflation. This study uses secondary data through Bank Indonesia office and The Federal Reserve which analyzed by Vector Error Correction Model (VECM) and Eviews 10 program. The result during the period of this study shows that transmission direct exchange rate pass-through is more effective to affect Inflation. While transmission indirect exchange rate pass-through is less effective to affect the Inflation which reflects the price stability as the ultimate objective of monetary policy in Indonesia.

Item Type: Conference or Workshop Item (Paper)
Keywords: Exchange Rate; Net Exports; Difference of BI Rate and The Fed Rate; Foreign Exchange; Reserves and Inflation
Subjects: H Social Sciences > HG Finance > HG3810 Foreign exchange. International finance. International monetary system
H Social Sciences > HG Finance
H Social Sciences > HJ Public Finance
H Social Sciences > HJ Public Finance > HJ2240 Revenue. Taxation. Internal revenue
H Social Sciences > HJ Public Finance > HJ2240 Revenue. Taxation. Internal revenue > HJ2351 Inflation and taxation
Divisions: Program Pasca Sarjana
Depositing User: Mrs Catur Dedek Khadijah
Date Deposited: 10 Mar 2020 04:55
URI: http://digilib.unimed.ac.id/id/eprint/38869

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