The Affect of Exchange Rate Changes to National Economy

1.Background of study

a.Indonesia is a country with unstable currency.

b.the unstable of currency value is the affect of international trade.

c.the condition of Indonesian economy is very susceptive to currency exchange rate

changes

2.Statement of problems

a. what are the factors that cause rupiah exchange rate changes ?

b. how does the changes impact rupiah exchange rate against the USD on the national
economy ?

3.Theoritical approach

The exchange rate is the exchange between two different currencies which mean the
comparison between the value or price of the currency is. (Triyono (2008)

4.Discussion

The factor that causes exchange rate changes and the impact of it.

1. Inflation

inflation is a process of increase in the prices of public goods continuously. If a

foreign country is higher than its domestic inflation (Indonesia) then the Rupiah will be
switched with more foreign currency. If inflation rises to buy the same amount of foreign
currency must be exchanged for rupiah depreciation of rupiah or more.

2. Interest Rates

the interest rate is the amount earned by the people who lend and paid by borrower's
percentage of the funding that was agreed upon by both parties. monetary tightening that
encourages an increase in interest rates will lead to exchange rate appreciation due to the
infusion of capital and foreign.

3. The Money Supply

 the money supply is the money circulating in the hands of the community. when there
is excess money supply then balance of payments deficits and will on the contrary when there
is excess demand for money, the balance of payments surplus will be the excess amount of
money supply.

5. Conclusion

The conclusion is the influence of inflation, interest rates, and Money Supply affect of
rupiah's movement against the dollar.

inflation that bind suddenly will result in reduced its national export capabilities of the
country in question, thus reducing the supply of foreign exchange against in those country.
If domestic interest rates rise, while overseas interest rates remain so investor interest
to infuse capital in the country because of the higher expected return will be higher, so that
the incoming capital flows will be increased.

If the Government adds money supply, thus lowering interest rates and stimulating
investments abroad which capital flows out at the turn of the foreign exchange rate to rise.
with a large supply of money or the money supply will raise the prices of goods and at the
same time will raise the price of a foreign currency as measured by domestic currency.

Sources:

Jurnal JIBEKA Volume 9 Nomor 1 Februari 2015: 76 86

Jurnal Ekonomi Pembangunan Vol. 9, No. 2, Desember 2008, hal. 156 - 167
Sumber : BCA

Data Historis (14 Hari)

Tanggal Kurs Jual Kurs Beli Kurs Tengah

23 Mar 2016, Wed 13,300.00 13,000.00 13,150.00

22 Mar 2016, Tue 13,320.00 13,020.00 13,170.00

21 Mar 2016, Mon 13,285.00 12,985.00 13,135.00

18 Mar 2016, Fri 13,260.00 12,960.00 13,110.00

17 Mar 2016, Thu 13,235.00 12,935.00 13,085.00

16 Mar 2016, Wed 13,410.00 13,110.00 13,260.00

15 Mar 2016, Tue 13,320.00 13,020.00 13,170.00

14 Mar 2016, Mon 13,202.00 12,902.00 13,052.00

11 Mar 2016, Fri 13,215.00 12,915.00 13,065.00

10 Mar 2016, Thu 13,213.00 12,913.00 13,063.00

9 Mar 2016, Wed 13,290.00 12,990.00 13,140.00

8 Mar 2016, Tue 13,290.00 12,990.00 13,140.00

7 Mar 2016, Mon 13,225.00 12,925.00 13,075.00

4 Mar 2016, Fri 13,280.00 12,980.00 13,130.00