Name : Rizki Nauli Siregar
Study Program : S1-Economics
Title : Exchange Rate Uncertainty and Indonesia’s Bilateral Trade: A Sectoral Analysis
This thesis is the first research performed with the aim to explicate sectoral analysis of exchange rate uncertainty’s impacts on Indonesia’s bilateral trade. Having a sample of annual trade data in the period between 1987 and 2006, the research allocates 10 years of sample under the adoption of fixed-exchange rate regime and 10 years under the adoption of free-floating exchange rate regime. The research also calculates medium term and long term exchange rate uncertainty between rupiah and the currencies of Indonesia’s main trading partners. Using gravity model, the research estimates the impact of exchange rate uncertainty on trade. This research finds that exchange rate uncertainty discourages two trade sectors of Indonesia’s bilateral trade but also encourages other six trade sectors of Indonesia’s bilateral trade.
Exchange rate uncertainty, bilateral trade, gravity model, Indonesia