Exchange Rate Pass-Through into Import Prices In Major Southeast Asian Countries

Abstract

In this paper we estimate exchange rate pass-through into import prices in Indonesia, the Philippines, Singapore, and Thailand during the period from 1974 to 2000. The estimation results show that among the four countries only Singapore had incomplete exchange rate pass-through; the other three countries had complete exchange rate pass-through. The degrees of exchange rate pass-through in major Southeast Asian countries did not differ systematically from the degrees of exchange rate pass-through estimated in a sample of industrialized countries. Factors that seem to be contributing to the variation of exchange rate pass-through across countries are differential inflation rates, money growth, and the presence of MNCs together with intra-firm trade.