The Volatility of Rupiah Exchange Rate Impact on Main Commodity Exports to the OIC Member States

Handoyo, Rossanto Dwi and Sari, Agustin Dwi Prihandika and Ibrahim, Kabiru Hannafi and Sarmidi, Tamat (2022) The Volatility of Rupiah Exchange Rate Impact on Main Commodity Exports to the OIC Member States. Economies, 10 (4). p. 78. ISSN 2227-7099

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Abstract

This study analysed the impact of the volatility of the rupiah exchange rate on four main commodities exported from Indonesia to six member countries of the Organisation of the Islamic Cooperation (OIC) (Saudi Arabia, Malaysia, Pakistan, United Arab Emirates, Turkey, and Bangladesh). The study employed monthly data spanning from January 2007 to December 2019 and the EGARCH method to obtain exchange rate volatility, while the ARDL method was used to model both the short-run and long-run impact of exchange rate and its volatility on exports. In the short term, findings revealed that exchange rate volatility has a significant negative effect on five main commodity exports to OIC countries, whereas, in the long-term, volatility of the exchange rate negatively affects twelve main commodity exports to OIC countries. Our results further imply that most of Indonesia’s exporters to six OIC Member countries are risk-averse.

Item Type: Article
Subjects: East India Archive > Multidisciplinary
Depositing User: Unnamed user with email support@eastindiaarchive.com
Date Deposited: 21 Jun 2023 09:20
Last Modified: 02 Oct 2024 07:18
URI: http://ebooks.keeplibrary.com/id/eprint/1492

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