Exchange Rate Pass-through to Import Prices in Indonesia: Evidence Post Free Floating Exchange Rate

Sri, Isnowati and Mulyo, Budi Setiawan, Exchange Rate Pass-through to Import Prices in Indonesia: Evidence Post Free Floating Exchange Rate. International Journal of Economics and Financial Issues, 2017, 7(1), 323-328..

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Abstract

The aim of this research was to examine the interdependence between import price, exchange rate, national income and inflation. The data analysis method used was structural vector autoregresive. The analysis was conducted on the impulse response function and forecast error variance decompositions (FEDVs) to determine the effect of exchange rate to import price and national income. The results show that the degree of exchange rate pass-through was incomplete. The exchange rate shock had positive effect on import price and had negative effect on national income. Meanwhile, the effect of inflation on import price was negative. Furthermore, FEDVs analysis show that the variations of import price were largely determined by the import price, and the exchange rate variations were largely determined by the exchange rate itself. The research results show that exchange rate, national income and inflation were gradually getting stronger and gave permanent effects.

Item Type:	Article
Subjects:	H Social Sciences > H Social Sciences (General)
Faculty / Institution:	Fakultas Ekonomika dan Bisnis
Depositing User:	Fakultas Ekonomi
Date Deposited:	22 Jun 2023 02:54
Last Modified:	22 Jun 2023 02:54
URI:	https://eprints.unisbank.ac.id/id/eprint/9619

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