Abstract
This study aims to analyze the effect of imports, foreign exchange reserves, foreign debt, and interest rates on the currency exchange rates against the United States Dollar in Southeast Asia countries. The study results found that from 2010 to 2017, the currency exchange rates against the United States Dollar in Southeast Asian countries tended to weaken (depreciate). The highest growth in the exchange rate against the United States dollar was in Indonesia, while the lowest was in Singapore. Foreign exchange reserves negatively affect foreign debt, and imports positively affect countries' exchange rates in the Southeast Asia region against the United States dollar. On the other hand, interest rates do not show a significant effect.
Highlights
Currency exchange rates are related to government policies, especially monetary authorities. Dornbusch et al (2018) show that unexpected monetary policy shocks can occur disproportionately and produce large fluctuations in currency exchange rates
The decline in the value of the currencies of Southeast Asian countries against the United States dollar had a significant impact on changes in macroeconomic variables such as swelling foreign debt, rising prices of imported goods so that economic growth decreased
This study aims to examine the impact of macroeconomic variables on currency exchange rates by expanding the study area to one country but to six countries in the Southeast Asia region, namely Indonesia, Malaysia, Thailand, Vietnam, the Philippines, and Singapore
Summary
Currency exchange rates are related to government policies, especially monetary authorities. Dornbusch et al (2018) show that unexpected monetary policy shocks can occur disproportionately and produce large fluctuations in currency exchange rates (overshooting effect). Currency exchange rates are related to government policies, especially monetary authorities. The decline in the value of the currencies of Southeast Asian countries against the United States dollar had a significant impact on changes in macroeconomic variables such as swelling foreign debt, rising prices of imported goods so that economic growth decreased. Fluctuations in currency exchange rates for countries in Southeast Asia are highly dependent on factors that influence them, both internal and external. Changes in Currency exchange rates depend on several factors that affect the supply and demand for foreign exchange. The demand for foreign exchange is related to imports and foreign debt payment. The supply of foreign currency depends on the availability of foreign exchange reserves
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