The Determinant Analysis of the Indonesia’s Foreign Exchange Reserves in 2008 – 2018

Abstract

This study aims to analyze the effect of exports, imports, rupiah/US Dollar exchange rates, direct foreign investment, foreign debt and inflation on the Indonesia’s foreign exchange reserves in 2008 – 2018. The method used in this study is the ARCH/GARCH, with the GARCH model (2.1) selected, stationary tests, co-integration tests, statistical tests. The results show exports, foreign direct investment, and foreign debt have a significant positive effect on Indonesia's foreign exchange reserves. However, imports have a negative and insignificant effect, while the exchange rates negatively and significantly effect and inflation has an insignificant negative effect on foreign exchange reserves.