How responsive are Indonesia's bilateral inpayments and outpayments to real depreciation of Rupiah?

Abstract

Purpose

The purpose of this paper is to investigate the sensitivity of Indonesia's inpayments and outpayments to currency depreciation on a bilateral basis.

Design/methodology/approach

The methodology used is based on the bounds testing approach.

Findings

It is found that while real depreciation of Rupiah has short‐run effects in a majority of the cases, these effects last into the long‐term in almost 50 percent of the cases. Surprisingly, almost all of the affected partners in the long run are found to be the Asian countries.

Originality/value

The paper is very original in that no one has looked at this issue before.

Citation

Bahmani‐Oskooee, M. and Harvey, H. (2012), "How responsive are Indonesia's bilateral inpayments and outpayments to real depreciation of Rupiah?", Studies in Economics and Finance, Vol. 29 No. 2, pp. 133-143. https://doi.org/10.1108/108s67371211229145