FOREIGN EXCHANGE EXPECTATIONS IN INDONESIA: REGIME SWITCHING CHARTISTS AND FUNDAMENTALISTS APPROACH

Authors

Ferry Syarifuddin, Bank Indonesia, IndonesiaFollow
Noer Azam Achsani, Bogor Agricultural University, IndonesiaFollow
Dedi Budiman Hakim, Bogor Agricultural University, IndonesiaFollow
Toni Bakhtiar, Bogor Agricultural University, IndonesiaFollow

Document Type

Article

Abstract

In this research, the effect of central bank intervention within a heterogeneous expectation exchange rate model is investigated. The results are supporting both chartists and fundamentalist regimes. In the period investigated, chartist dominates in determining the exchange rate. While BI foreign exchange intervention can effectively push the market exchange-rate to its long-run fundamental equilibrium, however, Bank Indonesia’s effort to exert a stabilizing effect of foreign exchange interventions, the result does not show a success.

Recommended Citation

Syarifuddin, Ferry; Achsani, Noer Azam; Hakim, Dedi Budiman; and Bakhtiar, Toni (2014) "FOREIGN EXCHANGE EXPECTATIONS IN INDONESIA: REGIME SWITCHING CHARTISTS AND FUNDAMENTALISTS APPROACH," Bulletin of Monetary Economics and Banking: Vol. 17: No. 2, Article 3.
DOI: https://doi.org/10.21098/bemp.v17i2.49
Available at: https://bulletin.bmeb-bi.org/bmeb/vol17/iss2/3

First Page

197

Last Page

220

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

Indonesia

Affiliation

Bogor Agricultural University