e-Jurnal Apresiasi Ekonomi Volume 12.
Nomor 2.
Mei 2024: 279-290 ISSN Cetak : 2337-3997 ISSN Online : 2613-9774 THE INFLUENCE OF FOREIGN EXCHANGE RESERVES.
EXPORTS,
IMPORTS.
INFLATION.
GROSS DOMESTIC PRODUCT (GDP) AND
MONEY SUPPLY ON EXCHANGE RATES IN ASEAN COUNTRIES
Frila Rezeta1 .
Aris Soelistyo2.
Muhammad Khoirul Fuddin
1,2,3
Faculty of Economics and Business.
University of Muhammadiyah Malang Email: rezetafrila@gmail.
com Email: aris_s@umm.
ABSTRACT
The exchange rate for each country is very important because the stronger the exchange rate of a currency in a country, it indicates that the level of the economy in the country concerned has increased and is good.
how and whether foreign exchange reserves, exports, imports, inflation.
GDP, and money supply can affect the exchange rate in 11 ASEAN countries.
This study aims to analyze how the effect of foreign exchange reserves, exports, imports and also inflation on exchange rates in the country, the results of this study are generated from processing using panel data with 20 years of data from 2003-2022 and 11 ASEAN countries.
In this study, the method we used to support the creation of this research is a quantitative method with panel data and multiple linear regression approaches where in this study using data - data that has been hung with panel data models used to support the results of this study.
The results of this study indicate that the best model is the Fixet Effect estimation and the test results of the foreign exchange reserve variable (X.
has a negative insignificant effect, the export variable (X.
is negative significant, the import variable (X.
is positive significant, the inflation variable (X.
is insignificant.
GDP (X.
is negative significant and the money supply variable (X.
has a significant effect on exchange rates in ASEAN countries.
Keywords: Foreign exchange reserves, exports, imports, exchange rate.
GDP, money supply.
INTRODUCTION
ASEAN is a country whose economy refers to an open economy where countries participate in export activities, imports with other countries where each country has and uses a means of exchange for the comparison of the value of one country's money to another to facilitate these activities, this comparison is called exchange rate.
Which exchange rate is one of the references to economic development in the international market in each country.
The exchange rate is a currency value that is applied for current payments and even for the future.
When the exchange rate is strengthening, it also has a positive and negative The positive impact is that when buying foreign products, the price will be cheaper.
However, the negative impact is that shipping value decreases because Rupiah strengthens.
exchange rate that is too low will be bad for a country and will cause an economic crisis.
The exchange rate can impact the level of transparent economic proposals.
because when the value appreciates, the value of foreign products can decrease and the total imports and exports will decrease.
Meanwhile, when the value of the currency depreciates, foreign goods will look more expensive and will reduce the level of imports but the level of exports will increase because domestic goods will look cheaper.
order for the economy in a country to stabilize, each country is usually competing to make their currency exchange rate stronger because this indicates that the country's economy has increased and this affects the country's economic sustainability for the future.
Exchange movements in foreign countries are reflected in the availability of foreign exchange, targeted to make government activities run smoothly as well as market intervention, resulting in an increase in exchange prices.
will be The higher the foreign exchange reserves, the more stable the currency value tends to be (Utami and Islami, 2.
A balanced value shows that the country is in good condition.
The greater the exchange rate, the stronger the economy, the higher the availability of foreign This high level shows that the country has expertise for the international economy .
and financial transactions.
Foreign exchange reserves are foreign currency, deposits and foreign bonds held by the Central Bank and monetary authorities of a country (Saibuma et al.
The effect of the the level of inflation in the exchange rate is translated .
Absolute p is said by exchange agencies to show that the e-Jurnal Apresiasi Ekonomi Volume 12.
Nomor 2.
Mei 2024: 279-290 value of a product is not the same between several If the comparison of values is in harmony, then the proponent changes and the value decreases.
(Noor, 2.
The amount of GDP movement also affects the exchange rate, if the excessive amount of GDP marketed to the public can cause the price of goods to be cheaper and people flock to consume these goods and the more money in circulation can result in exchange conflicts between countries whose value shrinks.
GDP is the number of goods and services obtained goods since 1 year.
Monetary considerations require primarily the function of the total funds existing in the country's economy.
More money coming into the economy can share its value exchange demands of its currency against foreign currencies.
Differences in the level of national income in two countries can have a significant impact on export transactions, imports of goods, and asset transactions between the countries concerned (Rofi'i, 2.
Here.
The total existing funds consist of all residents, not counting the amount of money in banks.
an increase in the total funds distributed among citizens to increase their demand of both domestic and foreign goods (Adhista, 2.
which if the money supply is excessive will cause prolonged inflation.
Problems regarding exchange rates are often associated with monetary policy, which is called expansive & contractionary monetary rules.
expansive type is carried out by the government when the economy is experiencing a recessionary situation, then the government with this policy will try to increase the money supply in society.
A country will face a series of problems, one of which is related to economic stability.
This problem is not limited to a single country, but is a recurring problem on a global scale.
The factors that affect economic stability vary from country to country and these variables can greatly affect the fluctuations experienced in the economy.
The impact of economic stability issues in a particular country can have on other countries as well.
For example, in the United States in 2018, there was a housing crisis that caused a global economic The failure of housing investments in the United States that could no longer operate ultimately affected various economies around the Some researchers try to see what factors can affect the exchange rate including (Noor, 2.
showing the results of foreign exchange has no effect, the higher the exchange rate, the higher the exchange rate greater the economic growth due to the availability of foreign exchange.
And ISSN Cetak : 2337-3997 ISSN Online : 2613-9774 also research conducted by (E Diah Lufti Wijayanti et al.
, 2.
explains that Indonesia's foreign exchange has an impact on normal value, study Farina and Husaini, .
shows if delivery has an effect on exchange rates in ASEAN, these results indicate that the value of exports does not contribute much to the exchange Then an assessment (BR Silitonga et al.
if the shipment has an adverse effect on the through (N.
Dewi, 2.
Sending has no effect on the exchange.
not only shipments that have an exchange effect but external shipments then study (BR Silitonga et al.
, 2.
inflation has a bad effect.
where if everything goes up everything goes up and vice versa.
in line with the study (Diana and Dewi, 2.
if inflation has no exchange effect.
However, according to (N.
Dewi, 2.
which states that the results of his research inflation affects the exchange rate Research conducted by researchers (Jaya, 2.
which states that GDP no effect of causal exchange due to the continuous demand for imported technology that causes the demand for foreign money to increase, this encourages the exchange rate use on dollars.
inconsistent with the study (Wilya, 2.
which states that Domestic gross goods dominant effect on exchange.
as well as studies (Adhista, 2.
if JUB has an the impact on the exchange of results is due to the effects that follows the movement of the increase or decrease in the amount of money bArAdar.
with the research (Viphindratin et al.
, 2.
which also if the total existing funds have a sufficient effect on the exchange rate.
In this research test, all ASEAN countries are the main destination focus, namely Brunei Darussalam.
Indonesia.
Laos.
Cambodia.
Myanmar.
Malaysia.
Singapore.
Philippines.
Vietnam.
Thailand and Timor Leste because this ASEAN country has an average position as a developing country, only one of which has become a developed country, namely Singapore.
In this ASEAN country, trade activities are still active and very easy to rise and fall in stability which can later be influenced by the level of exchange rates.
In this study, the problems can be formulated, namely whether foreign exchange reserves, exports, imports, inflation.
GDP, and money supply can partially affect the exchange rate in 11 ASEAN countries? whether foreign exchange reserves, exports, imports, inflation.
GDP, and money supply can simultaneously affect the exchange rate in 11 ASEAN countries? e-Jurnal Apresiasi Ekonomi Volume 12.
Nomor 2.
Mei 2024: 279-290 The benefits of this research are to add insight into thinking, increase knowledge and for future reference and it is also hoped that this research can become a foundation or basis for further research.
Exchange Rate Aligned to spending parity theory introduced by Gustav Cassel.
The basic theory is that the proportion of the value of one cash to one that cannot be determined by the influence of the direct purchase of cash it applies to labor and also products that exist in each country concerned, the main attribute of this exchange scale hypothesis is a trade good that has a homogeneous nature and also the price of non-trade goods that can be There are also no barriers to international trade, transportation costs are not large, and inflation measures are comparable.
Therefore, each country has prices that are not the same as each other, even the purchasing power is basically for merchandise that is exchanged starting with one value of money then to the next cash value.
describes when the exchange rates based on capital flows and capital Exchange in the form of unity between countries is not the same in each country and is determined by promotions and proposals, and can also be used as a measuring medium.
the state a country if its economy is balanced or not.
(Aulia dan Masbar, 2.
Foreign exchange reserves Keynes' liquidity preference theory, which he proposed in 1936.
The central bank uses foreign exchange reserves, among others, for macroeconomic purposes, namely the exchange thought process of incorporating import exchange funding completed by public authorities to help progress interactions, exchange rate management is the reason for precaution, and the fulfillment of wealth diversification requirements .
etting returns from investment activities by using foreign exchange reserve.
is the motivation behind speculation (Aulia and Masbar, 2.
foreign exchange in the form of bank accumulation funds in foreign money well as securities, external assets that meet the following requirements: They are explicitly liquid, fixed in a major unrecognized monetary standard, overseen by money-related specialists, and can be used quickly to settle global exchanges.
These Foreign exchange is used by banks to pay for transfers between countries parties, this can be understood as the need for individuals to hold cash, for one of the transaction motives, precautionary motives and even speculation motives (Aulia and Masbar.
ISSN Cetak : 2337-3997 ISSN Online : 2613-9774 Foreign exchange is used as an element of observing whether The resilience of the economy is observed by its marketing reach where in its management Bank Indonesia can make payments that can obtain loans (Wisnu, 2.
Export and Import Export is a sale of goods or services outside the country which uses a sales system, quality, quantity with terms agreed upon by both parties, the export of goods or services is also one of the superior international trade where this export can influence and see how a country develops its economy (BR Silitonga et al.
, 2.
The activity of exporting goods or services is one of marketing domestic products, the work of the nation's children who are worthy of consumption not only at home but also abroad.
Not only does it affect the country's currency, this activity also affects foreign exchange payments in the form of additional willingness and state revenue, even expanding employment opportunities for the community (Farina and Husaini, 2.
Import namely the purchase of services and goods between countries using an agreement.
This import activity is usually determined by how capable a country is which is determined by its national income, and the lower the country's ability to produce goods or services needed by the community, the higher the interest in buying goods from abroad to meet the needs of the community (Dananjaya et al.
, 2.
Inflation This was introduced by Irving Fisher, explaining that the total existing funds determine the existing value level as well as the development of the total existing funds to determine the value level.
of inflation.
According to Keynes inflation occurs because people tend to have a demand that exceeds the amount of money available, it can be interpreted that most people want to live more above average to exceed their income and economic capabilities.
Inflation is an event where the value experiences a periodic increase goods in one With the fluctuation of this inflation, it causes uncertainty for the welfare of the community and even results in a decrease in the community's day to day purchase of goods or services (Ilmas et al.
, 2.
Even this inflation if continuously in a country experiencing inflation then the result is weakening the economy and even impoverishing a country, therefore every country must issue the right policies in order to control inflation in their country.
Inflation is one indicator that shows government policies are monetary, fiscal or other (Muchiri, 2.
e-Jurnal Apresiasi Ekonomi Volume 12.
Nomor 2.
Mei 2024: 279-290 Gross Domestic Product According to Robert M.
Solow's neoclassical theory requires goods activities carried out by individuals, total capital, use of technology and its acquisition.
Through apridar GDP or GDP is all marketing of services and goods resulting from the production of a country, be it by domestic or foreign companies as long as they are still operating in the country and within a certain GDP is the price of all services and goods produced in a country in 1 year where GDP is the main element for measuring the health of the economy and can show the ability of customers to finance the various services and products needed to be delivered.
In aggregate, macroeconomic growth for a country's region is indicated by the level of gross domestic product (GDP) achievement.
GDP
is an increase in the aggregate of services and goods obtained by each sector through business in a country.
It is calculated in 3 ways: expenses, income and production.
services and goods that are elements of GDP are those used by final Money supply The total available funds dominant role in the economy.
The dominant total money in a country can share the value that is suppressed by the exchange rate.
an increase in total existing funds can increase the value of foreign exchange which is measured in national money (Musyaffa' and Sulasmiyati, 2.
Traditional economics describes funds as a medium of exchange that includes any object.
However, modern economics describes funds as a medium that exists to provide transactions for services and goods.
According to Keynes.
The total available funds impact normalcy market and will determine the interest rate.
In this study.
Keynes' theory of the amount of money demand is taking from the theory of 'money demand', namely the amount of money requested by the public for transaction needs, just in case and for speculation in the economy (Hasoloan, 2.
Definition of money according to the level of liquidity is divided into:
- M1 is the currency in the community plus demand deposits.
M1 deisebut also called The total funds available are short funds.
- M2 is M1 plus savings deposits and time deposits at commercial bank institutions.
M2 is known as broad money.
- M3 is M2 plus deposits at non-bank institutions.
All deposits in banks and non-bank financial institutions are known as quasi money.
ISSN Cetak : 2337-3997
ISSN Online : 2613-9774
RESEARCH METHODS
This research uses quantitative research that plays a role and targeted at analyzing the effects of foreign exchange, exports, imports, inflation.
GDP and also the money supply on exchange rates in ASEAN countries.
This quantitative method itself is a study that uses a lot of numbers in it by collecting data.
The purpose of quantitative research promises reliable information to control and anticipate events.
This research design will involve the collection of secondary data from various relevant sources such as wordbank.
The data that will be used is using the time span of the last 20 years starting from In collecting data, the accuracy of the data used will be considered through the Panel data model.
Panel data is in the form of a cross section & time series collaboration (Caraka.
The population in this analysis is 11 Asean of Brunei Darussalam.
Indonesia.
Laos.
Cambodia.
Myanmar.
Malaysia.
Singapore.
Philippines.
Vietnam.
Thailand and Timor Leste which are relevant in foreign exchange reserves, exports, imports, inflation.
GDP and also total funds available at the exchange price.
While the sample of this analysis is using the last 20 years of data in each of the 11 countries.
The information used by state economies and world banks from The purpose of collecting data is to collect literature related to the formation of targeted studies in order to obtain analytical methods for dealing with conflict.
Information gathering is obtained from the world bank and country economy.
While the independent variable is given the notation X:
lnYt = 0 1X1t 2X2t 3X3t 4X4t 5X5t 6X6t et Y = exchange rate X1 = foreign exchange reserves X2 = exports X3 = import X4 = inflation X5 = gdp X6 = money supply Regression is a pattern used to observe the impact between elements.
Panel data is in the form of cross data collaboration and time series (Prawoto, 2.
Common effect model (CEM) in the form of a concise pattern that combines both data.
Fixed effect model (FEM) e-Jurnal Apresiasi Ekonomi Volume 12.
Nomor 2.
Mei 2024: 279-290 To estimate it, use a dummy method to obtain an intercept ratio.
Random effect model (REM) to predict data related to periods and In data processing based on panel data regression, there are several data tests in it, namely:
Chow test in the form of observing the optimal FEM pattern rather than CEM.
use a hypothesis: H0 :
1 = 2 = .
= K = (CEM Mode.
H1: there is at least one intercept i O (FEM Mode.
i = 1,2, .
K (Sudarno & Ula, 2.
Conceptual framework ISSN Cetak : 2337-3997 ISSN Online : 2613-9774 .
Hausman test used to observe the optimal pattern between FEM & REM.
Breusch-pagan (Lagrange Multiplier tes.
in order to determine the optimal pattern between CEM & REM, by testing the difference in values.
The hypothesis used:
H0: (CEM model is bette.
H1: (REM model is bette.
foreign exchange exchange rate
gross domestic money supply DISCUSSION