The Effect of Changes in Sources of State Revenue from Foreign Exchange Reserves: An Analysis Study in Indonesia

Abstract

This study examines the impact of imports, exports, exchange rates, and inflation on Indonesia's foreign exchange reserves. Based on the test results on the variables of exchange rates, exports, imports & inflation, known that these variables have a significant effect on foreign exchange reserves. This study uses secondary data from the International Monetary Fund (IMF), the Central Bureau of Statistics & Bank Indonesia. The data is a time series from 1991-2022. The variables used in this study are export & import exchange rates & inflation of Indonesia's foreign exchange reserves. The statistical analysis used in this study is Ordinary Least Square (OLS). The resulting export variable has an influence coefficient of 0.625618, indicating that if exports increase by 1%, foreign exchange reserves will increase by 0.625618%. The import variable has an effect coefficient of -0.191346, meaning that if imports increase by 1%, foreign exchange reserves will decrease by 0.191346%. The exchange rate variable has an effect coefficient of 0.004454, meaning that if the exchange rate increases by 1%, foreign exchange reserves will increase by 0.004454%. The inflation variable has an influence coefficient of -0.883752, meaning that if inflation increases by 1%, foreign exchange reserves will decrease by 0.883752%. Based on these findings, Indonesia must increase the value of exports, reduce the value of imports, stabilize the exchange rate by buying domestic products, and refrain from importing products.