| Summary: | There are two main purpose of this reseach are to test influencing factors on
Rp/US$ exchange rate in short term and long term (equlibrium) relationship from
determining varibales. In this research also we could see the speed of adjsustment
level Rp/US$ to reach its equilibrium point wherever shock data happened on
each determining variables.
There are six determining variables that will be tested which are short term
interest rate (yield) differential between USA and Indonesia (STY), long term
interest rate (yield) differential between USA and Indonesia (STY), Broad Money
(M2S) in Indonesia, central bank of Indonesia reserve (RSV), Jakarta Composite
Index (JCI), and perception of investor on Indonesia credit risk which best
reflected in Indonesia Credit Default Swap (CDS).
This descriptive reseach will be test all hypotheses using Error Correction
Model (ECM). Time series data used in this reseach is taken monthly from
January 2006 up to December 2010.
It was proven by this reseach that all determining variables are significant
impact on Rp/US$ exchange rate both in the short term and long term
(equilibrium).
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