This study analyzes the influence of the monetary sector on Indonesia's current account balance in the period 1994-2023 using the Ordinary Least Squares (OLS) method. The variables analyzed include exchange rate, inflation, Gross Domestic Product (GDP) growth, foreign debt, and government spending. The results showed that all of these variables had a significant effect both partially and simultaneously on the current account balance, with a coefficient of determination of 78.65%. The findings confirm that exchange rate depreciation tends to increase exports, high inflation weakens the competitiveness of domestic products, import-based economic growth worsens the deficit, and foreign debt and inefficient government spending add pressure to the current account balance. This study recommends the importance of effective monetary and fiscal policy coordination, especially in exchange rate stabilization, inflation control, foreign debt management, and optimization of government spending, to support long-term economic stability and improve the performance of the current account balance.
Arfah et al. (2025) studied this question.