September 18, 2025

The Impact of Global Interest Rate Policy on Exchange Rate Stability in Developing Countries: A Case Study of Indonesia

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ZFZidnal FalahBandung Islamic University FHFeri Hardianto

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Implication

This analysis demonstrates that global interest rate policies influence exchange rate stability in Indonesia, suggesting domestic policies can mitigate these impacts.

Key Points

Significant depreciation of the rupiah is caused by Fed and ECB interest rate hikes, highlighting external vulnerabilities.
The increase in the BI Rate stabilizes the rupiah in the short term, showing effective domestic monetary policy response.
Multiple linear regression analyzed the influence of global interest rates on the rupiah exchange rate and domestic monetary policy effects.
Granger Causality test established a causal relationship between global interest rate hikes and rupiah weakening, emphasizing interconnectedness.

Cite This Study

Falah et al. (2025) studied this question.

synapsesocial.com/papers/68d462db31b076d99fa62a80 https://doi.org/10.64910/ecmont.v1i1.2

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Implication

This analysis demonstrates that global interest rate policies influence exchange rate stability in Indonesia, suggesting domestic policies can mitigate these impacts.

The Impact of Global Interest Rate Policy on Exchange Rate Stability in Developing Countries: A Case Study of Indonesia

Discussion

Member takes

Implication

Key Points

Cite This Study

The Impact of Global Interest Rate Policy on Exchange Rate Stability in Developing Countries: A Case Study of Indonesia

Discussion

Member takes

Implication

Key Points

Cite This Study

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