ABSTRACT: The aim of this research to analyze relationship equilibrium to the long-term and short-term
between the current account balance and foreign exchange reserve. As datum from the world bankstarts from
1982 until 2018, the used methodology Error Correction Model (ECM). The result of the estimate and analysis
were the current account balance and foreign exchange reserve stationary at level with the ADF test. The
variables had relationship equilibrium for the long-term and had one-way causality. That was the foreign
exchange reserve that causesthe current account balance. For the long-term, the current account balance had
positively and not significantly to change the development of the foreign exchange reserves. From the shortterm disequilibrium relationship to the equilibrium relationship, the current account balance had negatively and
not significantly too to change the development of the foreign exchange reserves.The value of the current
account balance of Indonesia has a deficit in some periods. Itwould have a bad impact on domestic foreign
exchange reserves. To the Government, the Ministry of Trade to keep the export performance to the stability of
the current account balance surplus to increase the Indonesian economic growth.
KEYWORDS : Foreign Exchange Reserve, Current Account Balance, EC
This document provides an introduction and overview of a study on foreign currency reserves and their impact on economic growth in Bangladesh. It discusses the objectives of the study, which are to analyze the volume of foreign currency reserves in Bangladesh over the last ten years, identify the major sources and impacts of foreign remittances on Bangladesh's economy and balance of payments, and provide recommendations to increase foreign remittances and improve related processes. The methodology and sources of data for the study are also outlined.
The document provides an overview of Kuwait's balance of payments and economic indicators. It notes that Kuwait has a vast amount of oil reserves that account for around half of its GDP, 95% of export revenues, and 80% of government revenues. The country's current account has grown significantly from 2004 to 2011 due to increasing oil exports, and it has a consistent positive balance in its current and capital accounts, but a negative balance in its financial account due to more outgoing foreign direct investment. Key economic indicators for Kuwait such as GDP, inflation, exports, and imports are also presented.
Domestically Issued Public Debt As A Sustainable AlternativeCRRC-Armenia
Armenia has issued domestic public debt since 1995 to finance government activities and borrowing needs. Domestic debt currently makes up a larger portion of Armenia's total public debt than in the past. However, Armenia's domestic debt market has weaknesses like high interest rates, a weak investor base consisting mostly of commercial banks, and a thin secondary market. To develop Armenia's domestic debt market in a sustainable way, the document recommends that Armenia establish a debt management strategy, implement pension reforms, broaden its network of primary dealers, and standardize debt instruments and issuance calendars.
Factors Influencing Exchange Rate: An Empirical Evidence from BangladeshMd. Shohel Rana
This study examines factors that influence exchange rate fluctuations in Bangladesh from 1987 to 2017. It analyzes the impact of remittances, GDP growth, and international trade on the real effective exchange rate. Stationarity tests and Johansen cointegration tests were used to examine the long-run relationship between the variables. VAR models and Granger causality tests found that remittances, GDP growth, and international trade significantly impact exchange rate fluctuations, explaining over 60% of variations. FMOLS tests concluded that GDP growth and international trade positively affect the exchange rate, while remittances have a negative effect. In summary, increases in GDP growth and international trade are found to increase exchange rate volatility, whereas increases in remittances decrease exchange
In this paper the concept of total gross seigniorage is used to analyze sources of revenues of National Bank of Georgia (NBG) and their distribution in the period 1996-1999. A comprehensive framework for measuring total seigniorage and its main components is presented and estimates of seigniorage revenues (sources and uses) are computed and analyzed. It is shown that in the considered period fiscal revenues from NBG have not been extensively financed by the money supply (consequently, cannot be estimated by the monetary seigniorage), but have been mostly covered by the reduction of the non government debt hold by central bank. Since the stock of international and private domestic assets hold by National Bank of Georgia is limited, in long run NBG cannot rely on it. The only way how, in the future, NBG can finance large deficits of the state budget is to use monetary seigniorage. This, however, will have to be accompanied by significant growth of monetary base and will cause a danger of large inflation.
Authored by: Jacek Cukrowski
Published in 2000
This document examines the relationship between foreign exchange dynamics and Nigeria's balance of payments using time series data from 1980-2008. Regression analysis found that exchange rate and external reserves positively predicted variations in the current and capital accounts, while external debt negatively predicted variations. Specifically, a favorable exchange rate and higher external reserves stimulated trade and investment, while higher external debt indicated economic weakness. The study concludes it is important for Nigeria to closely manage exchange rates, reserves, and debt to maintain a stable and competitive economy.
After the fall of Bretton Woods System, exchange rates become the focus of researchers and politicians. When a floating exchange rate system was started researchers investigated the impact of exchange rate volatility on international trade but the development of derivative instruments changed the researchers focus from currency volatility towards the impact of currency appreciation or depreciation on international trade. The main objective of this research was to investigate the short run and long run relationship between Turkey’s merchandise trade deficit and real effective exchange rate. The monthly data was collected from Central Bank of Republic of Turkey from March 2005 to September 2017. Autoregressive distributed lag (ARDL) approach and Error correction model (ECM) was used for the analysis. The finding shows that the variables have long run relationship but it is not significant at 5% significance level. The short run model also shows the insignificant results. These findings have the following policy implication: Turkey cannot improve the merchandise trade deficit by devaluating its currency.
This document provides an introduction and overview of a study on foreign currency reserves and their impact on economic growth in Bangladesh. It discusses the objectives of the study, which are to analyze the volume of foreign currency reserves in Bangladesh over the last ten years, identify the major sources and impacts of foreign remittances on Bangladesh's economy and balance of payments, and provide recommendations to increase foreign remittances and improve related processes. The methodology and sources of data for the study are also outlined.
The document provides an overview of Kuwait's balance of payments and economic indicators. It notes that Kuwait has a vast amount of oil reserves that account for around half of its GDP, 95% of export revenues, and 80% of government revenues. The country's current account has grown significantly from 2004 to 2011 due to increasing oil exports, and it has a consistent positive balance in its current and capital accounts, but a negative balance in its financial account due to more outgoing foreign direct investment. Key economic indicators for Kuwait such as GDP, inflation, exports, and imports are also presented.
Domestically Issued Public Debt As A Sustainable AlternativeCRRC-Armenia
Armenia has issued domestic public debt since 1995 to finance government activities and borrowing needs. Domestic debt currently makes up a larger portion of Armenia's total public debt than in the past. However, Armenia's domestic debt market has weaknesses like high interest rates, a weak investor base consisting mostly of commercial banks, and a thin secondary market. To develop Armenia's domestic debt market in a sustainable way, the document recommends that Armenia establish a debt management strategy, implement pension reforms, broaden its network of primary dealers, and standardize debt instruments and issuance calendars.
Factors Influencing Exchange Rate: An Empirical Evidence from BangladeshMd. Shohel Rana
This study examines factors that influence exchange rate fluctuations in Bangladesh from 1987 to 2017. It analyzes the impact of remittances, GDP growth, and international trade on the real effective exchange rate. Stationarity tests and Johansen cointegration tests were used to examine the long-run relationship between the variables. VAR models and Granger causality tests found that remittances, GDP growth, and international trade significantly impact exchange rate fluctuations, explaining over 60% of variations. FMOLS tests concluded that GDP growth and international trade positively affect the exchange rate, while remittances have a negative effect. In summary, increases in GDP growth and international trade are found to increase exchange rate volatility, whereas increases in remittances decrease exchange
In this paper the concept of total gross seigniorage is used to analyze sources of revenues of National Bank of Georgia (NBG) and their distribution in the period 1996-1999. A comprehensive framework for measuring total seigniorage and its main components is presented and estimates of seigniorage revenues (sources and uses) are computed and analyzed. It is shown that in the considered period fiscal revenues from NBG have not been extensively financed by the money supply (consequently, cannot be estimated by the monetary seigniorage), but have been mostly covered by the reduction of the non government debt hold by central bank. Since the stock of international and private domestic assets hold by National Bank of Georgia is limited, in long run NBG cannot rely on it. The only way how, in the future, NBG can finance large deficits of the state budget is to use monetary seigniorage. This, however, will have to be accompanied by significant growth of monetary base and will cause a danger of large inflation.
Authored by: Jacek Cukrowski
Published in 2000
This document examines the relationship between foreign exchange dynamics and Nigeria's balance of payments using time series data from 1980-2008. Regression analysis found that exchange rate and external reserves positively predicted variations in the current and capital accounts, while external debt negatively predicted variations. Specifically, a favorable exchange rate and higher external reserves stimulated trade and investment, while higher external debt indicated economic weakness. The study concludes it is important for Nigeria to closely manage exchange rates, reserves, and debt to maintain a stable and competitive economy.
After the fall of Bretton Woods System, exchange rates become the focus of researchers and politicians. When a floating exchange rate system was started researchers investigated the impact of exchange rate volatility on international trade but the development of derivative instruments changed the researchers focus from currency volatility towards the impact of currency appreciation or depreciation on international trade. The main objective of this research was to investigate the short run and long run relationship between Turkey’s merchandise trade deficit and real effective exchange rate. The monthly data was collected from Central Bank of Republic of Turkey from March 2005 to September 2017. Autoregressive distributed lag (ARDL) approach and Error correction model (ECM) was used for the analysis. The finding shows that the variables have long run relationship but it is not significant at 5% significance level. The short run model also shows the insignificant results. These findings have the following policy implication: Turkey cannot improve the merchandise trade deficit by devaluating its currency.
The central bank is responsible for a country's monetary policy and implements that policy through interest rates, money supply controls, and other tools. The Monetary Authority of Singapore (MAS) was established in 1971 to oversee monetary functions and promote monetary stability. The MAS accepts deposits, grants loans, regulates banks and other financial institutions, issues currency, and acts as the government's banker and manager of foreign assets. Its goals include maintaining monetary stability and a strong currency.
This paper analyzes long-term data on short-term Japanese interest rates and compares them to key foreign rates to assess Japan's integration into international money markets over time. It finds that Japanese interest rates became less volatile and more closely linked to foreign rates in the inter-war period, possibly due to deeper financial integration or use of interest rates to manage external imbalances. The paper uses econometric analysis and cointegration tests to examine these relationships under changing domestic policy regimes and degrees of capital mobility. It provides a thorough review of relevant theoretical frameworks and methodology to guide the empirical analysis.
This document is a final project report submitted by Akash Sudhir Salve to the Yadavrao Tasgaonkar Institute of Management Studies and Research. The project examines India's foreign exchange reserves from 2007 to 2012. It includes sections on the objectives of the study, history and structure of foreign exchange markets, types of foreign exchange risk and hedging, methodology, analysis of data, findings, and the impact of foreign exchange on the Indian economy and business. The report also contains a case study, lessons on avoiding forex trading mistakes, and conclusions.
Determinants of interest rate empirical evidence from pakistanAlexander Decker
This document summarizes a research paper that analyzes the determinants of interest rates in Pakistan. It begins with background definitions of key rate indicators like KIBOR and inflation. It then states the purpose is to study the determinants of interest rates, with the hypotheses that inflation and exchange rates have a positive impact on interest rates. The literature review summarizes several past studies on factors influencing interest rates in countries like Pakistan, Austria, and Japan. These studies examined the relationship between policy rates, market rates, inflation, and economic growth.
The Key factor that has resulted policy issues in equity and debt of international Finance due to the “International finance liberalization”
There are certain factors that could result policy issues in equity and debt of international finances which has furnished below.
Covering the sequence and order of financial liberalisation,
Capital controls,
exchange rate policy
asymmetric information
The document discusses the Balance of Payments (BOP) statement of a country. It explains that the BOP records all monetary transactions between a country and the rest of the world over a period of time. It includes transactions by individuals, corporations, and the government. The BOP indicates whether a country has a trade surplus or deficit. It also helps the government monitor the economy and make fiscal and trade policy decisions. The BOP has three key accounts - the current account for goods and services, the capital account for asset transactions, and the financial account for investments and intangible assets. Maintaining a balanced BOP is important for economic stability.
The document discusses foreign exchange management. It provides details about the foreign exchange market, including that it is a worldwide network of banks, brokers, corporations and central banks that buy and sell currencies. The market functions 24 hours a day. It also discusses the major participants in the market like commercial banks, customers, central banks, and speculators. Furthermore, it explains different types of transactions in the various markets like spot, forward and cash transactions. It also covers exchange rate systems used by different countries like the gold standard and floating exchange rates.
This document summarizes Rakesh Mohan's remarks on the impact of the global financial crisis on India and Asia. Mohan notes that while India has been relatively resilient, it still faces some risks from potential reversals in capital flows and financial contagion. So far the main impacts have been declines in equity markets, portfolio investments, and commercial borrowings. However, strong domestic demand and corporate balance sheets have limited macroeconomic effects. Mohan outlines India's approach of gradual financial liberalization and prudent regulation as helping mitigate risks.
The document discusses the differences between current accounts and capital accounts, which are two important concepts in macroeconomics and international finance. Current accounts track a country's net income and involve trade of goods/services as well as income/transfers, while capital accounts track the net flow of money into and out of a country via investments. Maintaining balance of payments involves balancing deficits in current accounts with surpluses in capital accounts. Both types of accounts provide information about a country's economic conditions and financial interactions with other nations.
This document summarizes a study that uses a monetary model to examine the link between monetary factors and Nigeria's balance of payments from 2007 to 2018. The study estimates a balance of payments model using two-stage least squares to control for endogeneity. The results show that domestic credit is statistically significant and negatively related to foreign reserve assets, indicating that balance of payments is a monetary phenomenon in Nigeria. Specifically, the velocity of money circulation is approximately 120% and the marginal propensity to import is around 14%. The study recommends that monetary authorities consider using domestic credit to manage balance of payments disequilibriums. It also argues that increasing domestic credit can boost the economy while marginally decreasing foreign reserves through higher imports.
Introduction to international finance and International economyAparrajithaAriyadasa
International economics is a field of study that assesses the implications of international trade, international investment, and international borrowing and lending.
There are two broad sub-fields within the discipline: international trade and international finance
The document discusses the internationalization of the Chinese yuan (RMB). It notes that while RMB deposits in Hong Kong declined in 2012 due to increased investment options in China, this represents positive development toward the RMB's role in investment. Banks are developing strategies around opportunities from RMB internationalization. The document also outlines the current state of RMB clearing infrastructure and expectations for the future evolution of RMB clearing systems to support its growing international use.
Unit 3.2 Regulatory Framework - International PerspectiveCharu Rastogi
This presentation covers regulatory framework of international finance from an International Perspective – Federal Bank, European Central Bank and guidelines for international investments given by International Chambers of Commerce (ICC).
- The RMB's rise as an international currency is inevitable due to China's economic size and trade relationships. However, this process will be gradual rather than straightforward, described as "creeping internationalization."
- Currently, offshore RMB is primarily used for trade settlement, investment flows, and reserve management. Trade settlement in RMB is growing rapidly, led by Hong Kong, though it remains a small percentage of global trade. Investment flows are expected to drive more innovation in offshore RMB markets.
- Countries deepening economic ties with China will increase RMB holdings for strategic reasons, even if trade and investment are not yet substantial. New offshore RMB hubs will emerge alongside Hong Kong, with London and Singapore
Factors influencing the crash in the share market in dhaka stock exchangeAlexander Decker
This document discusses factors influencing the crash of the share market in the Dhaka Stock Exchange. It conducted a study interviewing 150 respondents to test 11 hypotheses related to investor behavior and factors contributing to the market crash. Most hypotheses were accepted, including that investors sought insider information and entered the market for high profits. Two hypotheses were rejected: that investors carefully calculated assets and invested at the right time. The literature review discusses capital market volatility, emerging markets, and the history of the Dhaka Stock Exchange.
Effect of Stock Price Index in Global Stock againstComposite Stock Price Inde...iosrjce
1) The document analyzes the influence of various global stock price indices (Dow Jones Industrial Average, Nikkei 225, Hang Seng Index, Shanghai Stock Exchange Composite Index) on Indonesia's Composite Stock Price Index from January 2008 to December 2013.
2) It finds that the global indices generally have a positive influence on Indonesia's index, with the Dow Jones having the strongest effect. The Dow Jones explains about 73% of movements in Indonesia's index.
3) The study concludes that because of globalization and investors, stock price movements in one exchange influence others, so global economic conditions are reflected in Indonesia's stock market through these linkages with major world indices.
The document discusses recent developments in India's money market. It provides context on the money market and its role in facilitating short-term lending. It then summarizes that the money market has grown tremendously in India since economic reforms, with banks meeting short-term funding needs. Several reforms, like deregulating interest rates, establishing money market mutual funds and the liquidity adjustment facility, have improved the money market's functioning. Overall liquidity in the banking system remains high.
A study on functioning of foreign exchange marketVivek Mahajan
This document is a project report submitted by a student named Vivek Shriram Mahajan to the University of Mumbai in partial fulfillment of an M.Com degree. The report studies the functioning of foreign exchange markets. It contains chapters on the types of exchange rates (fixed and floating), the functions of foreign exchange markets, and foreign exchange markets in India. The student declares that the work is original and acknowledges the support received from teachers, family, and others in completing the project report.
Bank Industry: Bank of China
Created in 1912 in Beijing by Sun Yat Sen
Internationalisation since 1929
China mainland, Hong-Kong, Macao, Taïwan and 37 countries
This doctoral thesis by Asem Ahmed Abid Al-Tarawneh from Al-Andalus International University examines the factors affecting Jordan's international reserves. The thesis is directed by Luis Alberiko Gil-Alaña and Huthaifa Sameeh Al Qaralleh. It aims to identify the impact of international reserves on Jordan's economy by analyzing annual central bank data from 2000-2021 on reserves, external debt, interest rates, and current accounts. The methodology includes time series analysis and ARDL modeling to determine the relationships between variables.
Indonesian overseas-debt-relationship-for-economic-development-in-sharia-econ...Anno Tsanjay
1) The document analyzes the relationship between foreign debt and economic development in Indonesia from 2010-2019, as well as perspectives on foreign debt from Islamic economics.
2) It finds that foreign debt in Indonesia has a strong correlation with economic growth and development over the period studied.
3) From an Islamic economics perspective, government foreign debt is permissible if the form and mechanisms of cooperation adhere to Sharia principles and are for the benefit of the people.
The central bank is responsible for a country's monetary policy and implements that policy through interest rates, money supply controls, and other tools. The Monetary Authority of Singapore (MAS) was established in 1971 to oversee monetary functions and promote monetary stability. The MAS accepts deposits, grants loans, regulates banks and other financial institutions, issues currency, and acts as the government's banker and manager of foreign assets. Its goals include maintaining monetary stability and a strong currency.
This paper analyzes long-term data on short-term Japanese interest rates and compares them to key foreign rates to assess Japan's integration into international money markets over time. It finds that Japanese interest rates became less volatile and more closely linked to foreign rates in the inter-war period, possibly due to deeper financial integration or use of interest rates to manage external imbalances. The paper uses econometric analysis and cointegration tests to examine these relationships under changing domestic policy regimes and degrees of capital mobility. It provides a thorough review of relevant theoretical frameworks and methodology to guide the empirical analysis.
This document is a final project report submitted by Akash Sudhir Salve to the Yadavrao Tasgaonkar Institute of Management Studies and Research. The project examines India's foreign exchange reserves from 2007 to 2012. It includes sections on the objectives of the study, history and structure of foreign exchange markets, types of foreign exchange risk and hedging, methodology, analysis of data, findings, and the impact of foreign exchange on the Indian economy and business. The report also contains a case study, lessons on avoiding forex trading mistakes, and conclusions.
Determinants of interest rate empirical evidence from pakistanAlexander Decker
This document summarizes a research paper that analyzes the determinants of interest rates in Pakistan. It begins with background definitions of key rate indicators like KIBOR and inflation. It then states the purpose is to study the determinants of interest rates, with the hypotheses that inflation and exchange rates have a positive impact on interest rates. The literature review summarizes several past studies on factors influencing interest rates in countries like Pakistan, Austria, and Japan. These studies examined the relationship between policy rates, market rates, inflation, and economic growth.
The Key factor that has resulted policy issues in equity and debt of international Finance due to the “International finance liberalization”
There are certain factors that could result policy issues in equity and debt of international finances which has furnished below.
Covering the sequence and order of financial liberalisation,
Capital controls,
exchange rate policy
asymmetric information
The document discusses the Balance of Payments (BOP) statement of a country. It explains that the BOP records all monetary transactions between a country and the rest of the world over a period of time. It includes transactions by individuals, corporations, and the government. The BOP indicates whether a country has a trade surplus or deficit. It also helps the government monitor the economy and make fiscal and trade policy decisions. The BOP has three key accounts - the current account for goods and services, the capital account for asset transactions, and the financial account for investments and intangible assets. Maintaining a balanced BOP is important for economic stability.
The document discusses foreign exchange management. It provides details about the foreign exchange market, including that it is a worldwide network of banks, brokers, corporations and central banks that buy and sell currencies. The market functions 24 hours a day. It also discusses the major participants in the market like commercial banks, customers, central banks, and speculators. Furthermore, it explains different types of transactions in the various markets like spot, forward and cash transactions. It also covers exchange rate systems used by different countries like the gold standard and floating exchange rates.
This document summarizes Rakesh Mohan's remarks on the impact of the global financial crisis on India and Asia. Mohan notes that while India has been relatively resilient, it still faces some risks from potential reversals in capital flows and financial contagion. So far the main impacts have been declines in equity markets, portfolio investments, and commercial borrowings. However, strong domestic demand and corporate balance sheets have limited macroeconomic effects. Mohan outlines India's approach of gradual financial liberalization and prudent regulation as helping mitigate risks.
The document discusses the differences between current accounts and capital accounts, which are two important concepts in macroeconomics and international finance. Current accounts track a country's net income and involve trade of goods/services as well as income/transfers, while capital accounts track the net flow of money into and out of a country via investments. Maintaining balance of payments involves balancing deficits in current accounts with surpluses in capital accounts. Both types of accounts provide information about a country's economic conditions and financial interactions with other nations.
This document summarizes a study that uses a monetary model to examine the link between monetary factors and Nigeria's balance of payments from 2007 to 2018. The study estimates a balance of payments model using two-stage least squares to control for endogeneity. The results show that domestic credit is statistically significant and negatively related to foreign reserve assets, indicating that balance of payments is a monetary phenomenon in Nigeria. Specifically, the velocity of money circulation is approximately 120% and the marginal propensity to import is around 14%. The study recommends that monetary authorities consider using domestic credit to manage balance of payments disequilibriums. It also argues that increasing domestic credit can boost the economy while marginally decreasing foreign reserves through higher imports.
Introduction to international finance and International economyAparrajithaAriyadasa
International economics is a field of study that assesses the implications of international trade, international investment, and international borrowing and lending.
There are two broad sub-fields within the discipline: international trade and international finance
The document discusses the internationalization of the Chinese yuan (RMB). It notes that while RMB deposits in Hong Kong declined in 2012 due to increased investment options in China, this represents positive development toward the RMB's role in investment. Banks are developing strategies around opportunities from RMB internationalization. The document also outlines the current state of RMB clearing infrastructure and expectations for the future evolution of RMB clearing systems to support its growing international use.
Unit 3.2 Regulatory Framework - International PerspectiveCharu Rastogi
This presentation covers regulatory framework of international finance from an International Perspective – Federal Bank, European Central Bank and guidelines for international investments given by International Chambers of Commerce (ICC).
- The RMB's rise as an international currency is inevitable due to China's economic size and trade relationships. However, this process will be gradual rather than straightforward, described as "creeping internationalization."
- Currently, offshore RMB is primarily used for trade settlement, investment flows, and reserve management. Trade settlement in RMB is growing rapidly, led by Hong Kong, though it remains a small percentage of global trade. Investment flows are expected to drive more innovation in offshore RMB markets.
- Countries deepening economic ties with China will increase RMB holdings for strategic reasons, even if trade and investment are not yet substantial. New offshore RMB hubs will emerge alongside Hong Kong, with London and Singapore
Factors influencing the crash in the share market in dhaka stock exchangeAlexander Decker
This document discusses factors influencing the crash of the share market in the Dhaka Stock Exchange. It conducted a study interviewing 150 respondents to test 11 hypotheses related to investor behavior and factors contributing to the market crash. Most hypotheses were accepted, including that investors sought insider information and entered the market for high profits. Two hypotheses were rejected: that investors carefully calculated assets and invested at the right time. The literature review discusses capital market volatility, emerging markets, and the history of the Dhaka Stock Exchange.
Effect of Stock Price Index in Global Stock againstComposite Stock Price Inde...iosrjce
1) The document analyzes the influence of various global stock price indices (Dow Jones Industrial Average, Nikkei 225, Hang Seng Index, Shanghai Stock Exchange Composite Index) on Indonesia's Composite Stock Price Index from January 2008 to December 2013.
2) It finds that the global indices generally have a positive influence on Indonesia's index, with the Dow Jones having the strongest effect. The Dow Jones explains about 73% of movements in Indonesia's index.
3) The study concludes that because of globalization and investors, stock price movements in one exchange influence others, so global economic conditions are reflected in Indonesia's stock market through these linkages with major world indices.
The document discusses recent developments in India's money market. It provides context on the money market and its role in facilitating short-term lending. It then summarizes that the money market has grown tremendously in India since economic reforms, with banks meeting short-term funding needs. Several reforms, like deregulating interest rates, establishing money market mutual funds and the liquidity adjustment facility, have improved the money market's functioning. Overall liquidity in the banking system remains high.
A study on functioning of foreign exchange marketVivek Mahajan
This document is a project report submitted by a student named Vivek Shriram Mahajan to the University of Mumbai in partial fulfillment of an M.Com degree. The report studies the functioning of foreign exchange markets. It contains chapters on the types of exchange rates (fixed and floating), the functions of foreign exchange markets, and foreign exchange markets in India. The student declares that the work is original and acknowledges the support received from teachers, family, and others in completing the project report.
Bank Industry: Bank of China
Created in 1912 in Beijing by Sun Yat Sen
Internationalisation since 1929
China mainland, Hong-Kong, Macao, Taïwan and 37 countries
This doctoral thesis by Asem Ahmed Abid Al-Tarawneh from Al-Andalus International University examines the factors affecting Jordan's international reserves. The thesis is directed by Luis Alberiko Gil-Alaña and Huthaifa Sameeh Al Qaralleh. It aims to identify the impact of international reserves on Jordan's economy by analyzing annual central bank data from 2000-2021 on reserves, external debt, interest rates, and current accounts. The methodology includes time series analysis and ARDL modeling to determine the relationships between variables.
Indonesian overseas-debt-relationship-for-economic-development-in-sharia-econ...Anno Tsanjay
1) The document analyzes the relationship between foreign debt and economic development in Indonesia from 2010-2019, as well as perspectives on foreign debt from Islamic economics.
2) It finds that foreign debt in Indonesia has a strong correlation with economic growth and development over the period studied.
3) From an Islamic economics perspective, government foreign debt is permissible if the form and mechanisms of cooperation adhere to Sharia principles and are for the benefit of the people.
This document analyzes the impact of financial liberalization on broad money in Sri Lanka from 1977-2011. It constructs a financial liberalization index using principal component analysis of 10 policy variables. Regression analysis finds a positive relationship between broad money and the financial liberalization index in the short-run, indicating financial liberalization may positively impact broad money in Sri Lanka. The study aims to examine this relationship in the long-run as well.
A causality analysis of financial deepening and performance ofAlexander Decker
This study examines the causal relationship between financial deepening and economic performance in Nigeria from 1990-2013. Secondary data on gross domestic product (GDP), broad money supply (M2), market capitalization (MAC), and credit to the private sector (CPS) was collected from the Central Bank of Nigeria and National Bureau of Statistics. Unit root tests confirmed the variables were integrated of order one, or stationary after first differencing. The study aims to test for a long-run relationship between financial deepening and economic performance in Nigeria and investigate the direction of causality between the variables. The results will help inform government policies around manipulating the money supply and improving access to credit to facilitate economic growth and development.
A causality analysis of financial deepening and performance ofAlexander Decker
This study examines the causal relationship between financial deepening and economic performance in Nigeria from 1990-2013. Secondary data on gross domestic product (GDP), broad money supply (M2), market capitalization (MAC), and credit to the private sector (CPS) was collected from the Central Bank of Nigeria and National Bureau of Statistics. Unit root tests confirmed the variables were integrated of order one, or stationary after first differencing. The study aims to test for a long-run relationship between financial deepening and economic performance in Nigeria and investigate the direction of causality between the variables. The results will help inform government policies around manipulating the money supply and improving access to credit to facilitate economic growth and development.
This document is a report submitted by a group of students to their professor. It includes a letter of transmittal, acknowledgments, table of contents, and sections on the Bangladeshi Taka currency, literature review on factors affecting exchange rates, examples of global and local events impacting exchange rates, and forecasts. The group analyzed how monetary policy crises, purchasing power vs foreign exchange value, and US-China trade wars could impact the Bangladeshi Taka exchange rate. They concluded the report with forecasts on how certain events may cause the Taka to appreciate or depreciate.
11.impact of injection and withdrawal of money stock on economic growth in ni...Alexander Decker
This document discusses a research study on the impact of money stock injection and withdrawal on economic growth in Nigeria from 1970 to 2008. The study uses regression analysis to examine the relationship between money stock and GDP. It finds that injecting money stock into the economy tends to reduce interest rates and increase investment, thereby boosting economic growth. However, it also notes that withdrawing money stock reduces the money available in the economy. The document provides background on monetary policy and debates between Keynesian and monetarist views. It also reviews previous related literature and discusses how the Central Bank of Nigeria can inject and withdraw money from the economy through tools like reserve requirements and interest rates.
6.[60 67]impact of injection and withdrawal of money stock on economic growth...Alexander Decker
This document discusses a research study on the impact of money stock injection and withdrawal on economic growth in Nigeria from 1970 to 2008. The study uses regression analysis to examine the relationship between money stock and GDP. It finds that injecting money stock into the economy tends to reduce interest rates and increase investment, thereby boosting economic growth. However, it also notes that withdrawing money stock reduces the money available in the economy. The document provides background on monetary policy and debates between Keynesian and monetarist views. It also reviews previous related literature and discusses how the Central Bank of Nigeria can inject and withdraw money from the economy through tools like reserve requirements and interest rates.
Foreign capital flows depends on the prevailing monetary forces as supported by capital flows
theory and the mechanism linking these two variables is that contraction of net domestic assets through an
open market sale of bonds will place upward pressure on domestic interest rates. Higher interest rates attract
foreign funds, generating a capital inflow which relieves the pressure on domestic interest rates. Has this
actually happened? It is against this backdrop that the present study investigated the impact of monetary policy
on international capital inflows in Nigeria for a period of 22 years (1994-2015) using time series data. The
autoregressive distributed lag technique revealed that the short-run and long-run significant determinants of
foreign capital inflows are largely from broad money supply, nominal exchange rate, inflation rate and interest
rates spread except inflation rate that is insignificant in the long-run. This outcome upholds theoretical
prediction. Long-run equilibrium relationship was found between the dependent variable and the regressors.
Further examination of the short run dynamics of the model showed that the speed of adjustment coefficients
ECM (-1) to restore equilibrium have a negative sign and statistically significant at 1% level, ensuring that
long-run equilibrium can be attained and about 89% of the short-run deviation from the equilibrium (long-run)
position is corrected annually to maintain the equilibrium. Since the empirical evidence revealed that monetary
aggregates such as broad money supply, nominal exchange rate, inflation rate and interest rates spread
influence foreign capital inflows, it is therefore recommended that government should continue to pursue
expansionary monetary policy and foreign exchange policies that would ensure competitiveness of the
economy in order to attract the much needed foreign capital inflows that would engender economic growth.
This document discusses a study examining the relationship between banking sector development and economic growth in Lebanon from 1992-2011. The study uses regression analysis to test whether greater banking sector development, as represented by factors like private credit levels and banking efficiency, leads to increased economic growth. Preliminary analysis includes a Granger causality test to determine the direction of the relationship between financial development and GDP growth. Key banking sector variables analyzed are private credit levels, interest rate spreads, banking assets, concentration levels, and deposit growth rates. The goal is to evaluate how Lebanon's banking-centered financial system impacts economic activity and development.
Measuring the Dynamics of Financial Deepening and Economic Growth in Nigeria,...iosrjce
The study examined the relationship between financial deepening and economic growth for the
period 1981 to 2013 using empirical evidence from Nigeria. The Engel-Granger two-step cointegration
procedures and Error Correction Model (ECM) were used as the method of estimation. The analyses of
residuals of the OLS regression showed evidence in favour of cointegration between financial deepening and
economic growth. Similarly, estimates from the error correction model provide evidence to show that financial
deepening indicators and GDP series converge to a long-run equilibrium at a reasonably fast rate. The result
points to the fact that the deepening of the financial system can engineer the Nigerian economy to greater
growth.
Measuring the Dynamics of Financial Deepening and Economic Growth in Nigeria,...iosrjce
The study examined the relationship between financial deepening and economic growth for the
period 1981 to 2013 using empirical evidence from Nigeria. The Engel-Granger two-step cointegration
procedures and Error Correction Model (ECM) were used as the method of estimation. The analyses of
residuals of the OLS regression showed evidence in favour of cointegration between financial deepening and
economic growth. Similarly, estimates from the error correction model provide evidence to show that financial
deepening indicators and GDP series converge to a long-run equilibrium at a reasonably fast rate. The result
points to the fact that the deepening of the financial system can engineer the Nigerian economy to greater
growth.
Abstract
The exchange rates are at the heart of international economic relations and are an integral part of the everyday landscape of economic agents. The Tunisia like the other country is faced with the problem of determination of the rate of exchange that will allow him to achieve the major balances internal and external. The objective of this research is to explain the rate of exchange to the assistance of a number of explanatory variables to enable managers of the economic policy to appreciate in the time their contribution to economic activity. It is clear from the results of this research that have a positive influence on the equilibrium exchange rate while the external capital and the budgetary deficit have a significant negative impact on the equilibrium exchange rate.
Key words:
Exchange rate, budget deficit, exchange term, monetary mass
Impact of injection and withdrawal of money stock on economic growth in nigeriaAlexander Decker
This document summarizes a study that examines the impact of injecting and withdrawing money stock on economic growth in Nigeria from 1970 to 2008. It uses regression analysis to study the relationship between money supply (M2) and interest rates as indicators of money stock changes, and gross domestic product (GDP) as a measure of economic growth. The study finds that injecting money stock by increasing the money supply tends to reduce interest rates and increase investment, thereby stimulating economic growth. However, excessive money stock increases that are not matched by growth in real output can lead to inflation instead of higher growth.
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The aim of this study is to examine the impact of international capital flows on the economic growth in Jordan during the period from 2005 to 2017, The study also examines trends and composition of capital inflows. The study used descriptive analytical research method which was appropriate for the purpose of research. By using time series data, the study found that Foreign Direct Investment (FDI), foreign portfolio investment (FPI), grants (Gr) and Worker remittances (WR) are positively affecting the economic growth direct contribution. Based on the research results, the study came with a several recommendations, the most important recommendation is; the government of Jordan should create and relax the rules and regulations to attract more investors, and also the government should work hand in hand with the developed countries to create economic and employment opportunities, improve the country’s competitiveness, and expand growth within the private sector so that everyone in Jordan has the opportunity to contribute to a brighter future.
Finance companies, central bank of nigeria and economic developmentAlexander Decker
This document summarizes an empirical study that examines the relationship between Central Bank of Nigeria (CBN) regulatory activities, finance house activities, and economic development in Nigeria from 1992-2010. It uses gross domestic product (GDP) as a measure of economic development and proxies CBN activities with minimum paid up capital and shareholders fund, and finance house activities with domestic credit and total assets. The study finds that a significant relationship exists between finance house activities and economic development, but that CBN regulatory activities have no significant relationship with finance house operations. It recommends policies to encourage existing finance houses and license new ones to better support Nigeria's overall economy.
This document is a project report submitted by a student to the University of Mumbai on international capital movement. It includes a declaration by the student, acknowledgements, a table of contents, and sections covering objectives, research methodology, and various topics related to international capital movement such as meaning, types, factors affecting, role, importance, trends, and policies. The report provides an overview of concepts and issues related to the flow of capital across international borders.
The impact of interest rates on the development of an emerging market empiric...Alexander Decker
This document summarizes a journal article about the impact of interest rates on the development of emerging markets, using Nigeria as an empirical case study. It acknowledges people who assisted with the research. The abstract indicates that interest rates are difficult to forecast and impact borrowing costs for businesses. While higher rates could encourage savings in the long-run, current high rates in Nigeria of 12% are negatively impacting growth. The literature review discusses how inflation can stimulate or deter human capital formation and how interest rates influence savings, investment, and financial intermediation. It recommends Nigeria adopt pragmatic policies to reduce lending rates to single digits to boost the economy.
Similar to Using The ECM Approach between Growth of the Current Account Balance and Foreign Exchange Reserve in Indonesia (20)
The Influence of Green Tax Implementation and Social Responsibility Programs ...AJHSSR Journal
ABSTRACT : The issue of climate change related to carbon emissions has become an alarming global
phenomenon. The manufacturing sector contributes significantly to global greenhouse gas emissions. Therefore,
efforts to mitigate climate change through the implementation of green taxes and Social Responsibility
Programsare important for manufacturing industry. This research aims to analyze the effect of implementing
green tax and Social Responsibility Programs on environmentally sustainable development in manufacturing
industry. A quantitative approach is used with the research object of manufacturing industry listed on the
Indonesia Stock Exchange in 2020-2022. Analyzed using Partial Least Square (PLS) method. The research
results show that the implementation of green tax has a significant effect on environmentally sustainable
development, while Social Responsibility Programsdo not have a significant effect. These findings indicate that
green tax policies are effective in encouraging companies to switch to more environmentally friendly business
practices, but Social Responsibility Programshave not been fully integrated with environmental sustainability
efforts. This research contributes to the literature related to fiscal policy instruments and corporate social
responsibility practices in supporting environmentally sound sustainable development in the manufacturing
sector.
KEYWORDS: Green tax; Social responsibility; Environmentally sustainable development; Manufacturing
industry
Creating Immersive Language Learning Environments for Young LearnersAJHSSR Journal
ABSTRACT: Creating immersive language learning environments for young learners in English as a Foreign
Language (EFL) contexts has been a topic of considerable interest and debate among educators. Despite
numerous constraints such as time, curriculum, and stakeholder expectations, it is feasible to develop effective
immersive environments. This paper explores the concept of immersion language learning, tracing its historical
development and highlighting its benefits, particularly for young learners. It discusses the distinctions between
total, partial, and dual-immersion programs, emphasizing the critical role of using the target language as the
medium of instruction. Furthermore, it examines the cognitive and academic advantages documented in seminal
immersion programs like Saint-Lambert and Coral Way. By synthesizing research and offering practical
strategies for EFL settings, this paper underscores the importance of teacher commitment, the selection of
appropriate materials, and the adoption of Content and Language Integrated Learning (CLIL) principles.
Ultimately, the findings affirm that immersive environments significantly enhance language proficiency,
cognitive flexibility, and academic achievement, advocating for their broader implementation in EFL
classrooms.
KEYWORDS : CLIL, EFL, immersion, young learners
Study of Road Patterns and Space Formation in Settlement Areas on the Edge of...AJHSSR Journal
ABSTRACT: This research aims to find developments in road patterns from 2008 to 2024 and explain the
influence of road patterns on the formation of settlements on the edge of Lake Laut Tawar. This research uses a
quantitative descriptive approach and diachronic reading analysis techniques. This research uses overlapping
maps (superimpose), surveys, and interviews. The results of this research are to find factors that influence the
formation of settlements on the edge of Lake Laut Tawar, including the flat topographic conditions. Demographics
continue to increase in the population of the study location. The social culture at the study location is that the
residents who live on the edges of Lake Laut Tawar are residents who have family relationships. Distribution of
space designations that change function from agricultural land to residential land. Land values vary on the edges
of Lake Laut Tawar according to their zones.
KEYWORDS : Road Pattern, Lake Edge, Laut Tawar Lake
HAPIS AT KATANUNGAN, PANGUNGULILA NG MGA NAIWAN: SIPAT-SURI SA MAIKLING KUWEN...AJHSSR Journal
ABSTRAK: Ang pagpapatiwakal o sariling pagtapos ng buhay ay isang malubhang dilema na madalas na
kinahaharap ng isang taong nakararanas ng malalim na hirap at kalungkutan. Ang isa sa mga dahilan ng
pagpapatiwakal ay ang pagtingin dito bilang isang paraan ng pagtakas mula sa mga suliranin at hamon ng buhay.
Ang pagsusuri sa maikling kuwentong "Bahay sa Dilim" ni Alfredo Enriquez ay isang uri ng kwalitatibong
pananaliksik na gumamit ng pagsusuring pangnilalaman upang maabot ang layunin nito na tukuyin at
maipaliwanag ang mga isyu ng dilema at desisyon sa pagpapatiwakal, pagmamahal sa pamilya, at pangungulila
at pagsisisi. Sa paggamit ng mga teoryang pampanitikan tulad ng eksistensyalismo at romantisismo bilang mga
gabay, ninais ng mga mananaliksik na magbigay-liwanag at solusyon sa mga isyu ng pagpapatiwakal. Ito ay
magiging patnubay sa pagpapalawak ng kaalaman tungkol sa mga suliranin at karanasan ng mga pamilyang
Pilipino, pati na rin sa mga laban na hinaharap ng isang tao na nakararanas ng isang dilema. Sa dulo, hinahamon
ng pag-aaral na ito na gamitin pa ang iba't ibang uri ng panitikan na mas naglalarawan ng tunay na karanasan at
realidad ng buhay.
KEYWORDS : pagpapatiwakal, dilema, kalungkutan, buhay, pangungulila
Risk Tolerance as A Moderation of Financial Literacy and Lifestyle on Old Age...AJHSSR Journal
ABSTRACT:Old age financial planning must consider various factors, such as retirement age, estimated
monthly expenses in retirement, life expectancy, current and projected income until retirement which determines
the ability to save, assets and investments already owned, and the impact of inflation on future purchasing
power. Future, as well as the level of investment return. This research is causal associative research, this
research uses a quantitative approach. The population used in this research were employees within the Rectorate
of the University of Mataram, 67 Civil Servants. The saturated sampling method or total sampling is a sampling
technique in which all members of the population are used as samples. In this questionnaire, respondents'
answers were measured using a 6-point Likert scale: with ratings of 1 (strongly disagree), 2 (disagree), 3
(somewhat disagree), 4 (somewhat agree), 5 (agree), 6 (strongly agree). The Partial Least Square-Structural
Equation Model (PLS-SEM) with smart PLS 3.0 software was used to analyze the research data. The study's
findings indicate that financial literacy is found to have a positive and significant impact on old-age financial
planning among Rectorate employees at the University of Mataram. This indicates that as financial literacy
levels increase, so do activities relate to planning for retirement. Conversely, lifestyle does not exhibit a
significant influence on old-age financial planning for these employees. Furthermore, the interaction between
financial literacy and risk tolerance weakens the effect of financial literacy on retirement financial planning,
implying that higher risk tolerance diminishes the impact of financial literacy on planning for retirement.
However, risk tolerance does not moderate the influence of lifestyle on old-age financial planning, indicating
that the interaction between lifestyle and risk tolerance does not significantly affect retirement financial
planning for Rectorate employees at Mataram University.
KEYWORDS :Risk Tolerance, Financial Literacy, Lifestyle, Old Age Financial Planning
THE INFLUENCE OF APPLICATION FEATURES AND SECURITY THROUGH TRUST ON BRImo CUS...AJHSSR Journal
ABSTRACT : This research objective is to determine the influence of application features and security
through trust on BRImo customer loyalty in Banyuwangi. This research used the Explanatory Research type.
The population used in this research is all customers who use the BRImo application as of the end of December
2022 at the BRI Banyuwangi office, totaling 89,333 customers. The sampling technique in this research used a
multistage random sampling technique (multi stage sampling). In this study, the criteria used were customers
who happened to use the BRImo application and were financially registered, totaling 100 respondents. The data
analysis method used Structural Equation Modeling (SEM) with the SmaprtPLS application. The research
results showed that Application Features influence BRIMo Trust in Banyuwangi Regency. Security influenced
BRIMo's trust in Banyuwangi Regency. Application features influenced BRIMo customer loyalty in
Banyuwangi Regency. Security influenced BRIMo Customer Loyalty in Banyuwangi Regency. Trust influenced
BRIMo Customer Loyalty in Banyuwangi Regency. Trust mediated the influence of Application Features on
BRIMo Customer Loyalty in Banyuwangi Regency. Trust mediated the influence of Security on BRIMo
Customer Loyalty in Banyuwangi Regency.
KEYWORDS : Application feature, security, trust, loyalty
On Storytelling & Magic Realism in Rushdie’s Midnight’s Children, Shame, and ...AJHSSR Journal
ABSTRACT: Salman Rushdie’s novels are humorous books about serious times. His cosmopolitanism and
hybrid identity allowed him access to multiple cultures, religions, languages, dialects, and various modes of
writing. His style is often classified as magic realism, blending the imaginary with the real. He draws
inspiration from both English literature and Indian classical sources. Throughout his works, there is a lineage of
‘bastards of history’, a carnival of shameful characters scrolling all along his works. Rushdie intertwines fiction
with reality, incorporating intertextual references to Western literature in his texts, and frequently employing
mythology to explore history. This paper focuses on Rushdie’s three novels: Midnight’s Children, Shame, and
Haroun and the Sea of Stories, analyzing his postmodern storytelling techniques that aim to explore human
vices and follies while offering socio-political criticism.
KEYWORDS : Magic Realism, Rushdie, Satire, Storytelling, Transfictional Identities
CYBER SECURITY ENHANCEMENT IN NIGERIA. A CASE STUDY OF SIX STATES IN THE NORT...AJHSSR Journal
ABSTRACT: Security plays an important role in human life and endeavors. Securing information and
disseminating are critical challenges in the present day. This study aimed at identifying innovative technologies
that aid cybercrimes and can constitute threats to cybersecurity in North Central (Middle Belt) Nigeria covering
its six States and the FCT Abuja. A survey research design was adopted. The researchers employed the use of
Google form in administering the structured questionnaire. The instruments were faced validated by one expert
each from ICT and security. Cronbach Alpha reliability Coefficient was employed and achieved 0.83 level of
coefficient. The population of the study was 200, comprising 100 undergraduate students from computer science
and Computer/Robotics Education, 80 ICT instructors, technologists and lecturers in the University and
Technical Colleges in the Middle Belt Nigeria using innovative technologies for their daily jobs and 20 officers
of the crime agency such as: Independent Corrupt Practices Commission (ICPC) andEconomic and Financial
Crimes Commission (EFCC). Three research purposes and questions as well as the hypothesis guided the study
on Five (5) point Likert scale. Data collected were analyzed using mean and standard deviation for the three
research questions while three hypotheses were tested using t-test at 0.05 level of significance. Major findings
revealed that serious steps are needed to better secure the cybers against cybercrimes. Motivation, types, threats
and strategies for the prevention of cybercrimes were identified. The study recommends that government,
organizations and individuals should place emphasis on moral development, regular training of its employees,
regular update of software, use strong password, back up data and information, produce strong cybersecurity
policy, install antivirus soft and security surveillance (CCTV) in offices in order to safeguard its employees and
properties from being hacked and vandalized.
KEYWORDS: Cybersecurity, cybercrime, cyberattack, cybercriminal, computer virus, Virtual Private Networks
(VPN).
TACKLING ILLEGAL LOGGING: PROBLEMS AND CHALLENGESAJHSSR Journal
ABSTRACT: Illegal logging poses significant environmental, economic, and social challenges worldwide. This
research explores the problems associated with illegal logging in the present and future, shedding light on the
multifaceted nature of this issue and the accompanying challenges faced by governments, organizations, and
communities. The study employs a comprehensive literature review to analyze the current state of illegal
logging, its causes, and its consequences. It examines the environmental impact of deforestation, including
biodiversity loss, habitat degradation, and climate change. The researchers identify the challenges faced in
combating illegal logging in the present and anticipate future obstacles. It considers illegal logging networks'
complex and elusive nature, the limited enforcement capacity, and the need for international cooperation and
coordination. The study also examines the adoption and effectiveness of policies, regulations, and technological
advancements in curbing illegal logging practices in Davao City.
Keywords -Problems and Challenges, Cultural Disruptions, Anticipate future problems.
Towards Developing Students’ Soft Skills: The Case of ENSAM StudentsAJHSSR Journal
ABSTRACT: Building students’ soft skills has started to gain ground within the realm of higher education in
Morocco. However, the development of these skills requires a real-life context which simplifies their learning.
In this regard, the present study is mainly conducted to investigate the effect of the out-group collaborative
learning method on the development of students’ soft skills. Data for the study comes from 20 semester two
students at “Ecole Nationale Superieure d'Arts et Metiers” (ENSAM), Moulay Ismail University, Meknes, by
implementing a one-group pretest-posttest research design. The qualitative and quantitative findings confirm
that there is a statistically significant difference between the pretest and posttest results. Therefore, the adopted
treatment, the out-group collaborative learning method, has improved students’ communication, adaptability and
presentation delivery skills. The findings of this study can be useful for future studies and give language
teachers insights into the importance of using the out-group collaborative learning method in their teaching of
the soft skills.
KEYWORDS : collaborative learning, soft-skills, out-group collaborative learning method
STUDY ON THE DEVELOPMENT STRATEGY OF HUZHOU TOURISMAJHSSR Journal
ABSTRACT: Huzhou has rich tourism resources, as early as a considerable development since the reform and
opening up, especially in recent years, Huzhou tourism has ushered in a new period of development
opportunities. At present, Huzhou tourism has become one of the most characteristic tourist cities on the East
China tourism line. With the development of Huzhou City, the tourism industry has been further improved, and
the tourism degree of the whole city has further increased the transformation and upgrading of the tourism
industry. However, the development of tourism in Huzhou City still lags far behind the tourism development of
major cities in East China. This round of research mainly analyzes the current development of tourism in
Huzhou City, on the basis of analyzing the specific situation, pointed out that the current development of
Huzhou tourism problems, and then analyzes these problems one by one, and put forward some specific
solutions, so as to promote the further rapid development of tourism in Huzhou City.
KEYWORDS:Huzhou; Travel; Development
Enhancing Losari Beach Exploration: Augmented Reality for Immersive Visualiza...AJHSSR Journal
ABSTRACT: South Sulawesi, commonly known as Makassar, boasts rich cultural heritage and customs,
making it a prominent destination for tourism. Among its attractions, Losari beach stands out as a focal point for
visitors seeking to explore the city's natural beauty and cultural offerings. In this context, leveraging modern
technology such as augmented reality presents an innovative approach to showcasing Losari beach to potential
tourists. This research endeavors to introduce tourism assets in a more visually captivating manner through the
use of augmented reality. Utilizing software tools like Unity and Adobe Illustrator, the study focuses on creating
an immersive experience where tourists can interact with virtual representations of Losari beach. By simply
pointing their mobile phone cameras at designated markers or using barcode scanners, tourists can access
augmented reality features embedded within the application. The findings of this research aim to provide
valuable information, particularly for foreign tourists, about Losari beach, positioning it as a compelling
destination within South Sulawesi's diverse array of tourist attractions. Through this technological innovation,
the study seeks to enhance the visibility and appeal of Makassar city's tourism offerings on a global scale.
KEYWORDS: Visualizing, Losari Beach, Augmented Reality
DEVELOPMENT STATUS AND COUNTERMEASURES OF TMALL DURING THE COVID-19 EPIDEMICAJHSSR Journal
ABSTRACT:China's e-commerce enterprises have developed rapidly, among which Tmall has become one of
the largest retail shopping websites in China.But in the past year, the Covid-19 epidemic has brought a huge
impact to Chinese e-commerce enterprises, and Tmall is no exception.Therefore, the development status of
Tmall in the new crown epidemic situation was analyzed, and the viewpoint was put forward :Tmall1 stabilized
the situation in the face of the epidemic situation and made a very correct countermeasures.The influence of this
epidemic on Tmall was deeply analyzed, and the conclusion was made: the new crown epidemic is both a
challenge and an opportunity forTmall.
KEYWORDS:Tmall; COVID - 19 outbreak ; The electronic commerce
Factors affecting undergraduate students’ motivation at a university in Tra VinhAJHSSR Journal
ABSTRACT: Motivation plays an important role in foreign language learning process. This study aimed to
investigate student’s motivation patterns towards English language learning at a University in Tra Vinh, and factors
affecting their motivation change toward English language learning of non-English-major students in the semester.
The researcher used semi-structured interview at the first phase of choosing the participants and writing reflection
through the instrument called “My English Learning Motivation History” adapted from Sawyer (2007) to collect
qualitative data within 15 weeks. The participants consisted of nine first year non-English-major students who learning
General English at pre-intermediate level. They were chosen and divided into three groups of three members each
(high motivation group; average motivation group; and low motivation group). The results of the present study
identified six visual motivation patterns of three groups of students with different motivation fluctuation, through the
use of cluster analysis. The study also indicated a diversity of factors affecting students’ motivation involving internal
factors as influencing factors (cognitive, psychology, and emotion) and external factors as social factors (instructor,
peers, family, and learning environment) during English language learning in a period of 15 weeks. The findings of
the study helped teacher understand relationship of motivation change and its influential factors. Furthermore, the
findings also inspired next research about motivation development in learning English process.
KEY WORDS: language learning motivation, motivation change, motivation patterns, influential factors, students’
motivation.
The Impact of Work Stress and Digital Literacy on Employee Performance at PT ...AJHSSR Journal
ABSTRACT :This research aims to analyze the correlation between employee work stress and digital literacy
with employee performance at PT Telkom Akses Area Cirebon, both concurrently and partially. Employing a
quantitative approach, the study's objectives are descriptive and causal, adopting a positivist paradigm with a
deductive approach to theory development and a survey research strategy. Findings reveal that work stress
negatively and significantly impacts employee performance, while digital literacy positively and significantly
affects it. Simultaneously, work stress and digital literacy have a positive and significant influence on employee
performance. It is anticipated that company management will devise workload management strategies to
alleviate work stress and assess the implementation of more efficient digital technology to enhance employee
performance.
KEYWORDS -digital literacy, employee performance,job stress, multiple regression analysis, workload
management
The Settlement of Construction Disputes Through Dispute Councils From the Per...AJHSSR Journal
ABSTRACT:This research differs from the practice of business activity in the construction services industry,
which may lead to construction disputes. The settlement of construction disputes is a consensus based on the
basic principle of debate. If the discussions between the parties do not reach an agreement, the parties may take
measures to resolve the dispute through the dispute council. Because the standard governing the disputes
committee was not fully regulated, they did not comply with the principle of legal certainty. Therefore, further
research was needed to establish a theoretical basis for regulating the disputes committee in settling construction
disputes. This research is a standard legal research using a legal regulatory, conceptual, and comparative
approach. The research results show that the ideal concept of resolving construction disputes through a dispute
council based on the value of legal certainty is to establish that the position of the dispute council is a special
court that has the authority to resolve construction disputes under construction services agreements. To realize
the position of the Court of Disputation as a special court, it must be based on the creation of philosophical
values, the creationof legislative regulations, and the creation of the institutional structure of the Court of
Disputation.
KEYWORDS-Construction Disputes, Dispute Council, Special Court
VALUES OF ORAL LITERATURE IN THE SOCIETY: A STUDY OF FOLKTALES OFOGBA IN RIVE...AJHSSR Journal
ABSTRACT : Oral literature is a creative work of art that portends high merit and has the creative use of
imagination in preliterate societies. It adopts the genres of literature: drama, prose and poetry in the oral milieu,
using performance as its hallmark. It thrives on the use of oral data because of its orality. This paper focuses on
the moral values or oral literature in the society using Ogba as a spring board. The study was carried out in
communities ofOgba. The population of the study consists of ten towns and village, in Ogba. The theoretical
framework used is Dell Hyme’s ethno-poetics because the works of oral literature relate to the society. This
paper concludes that oral literature serves to against all odds; communicate ideas, emotions, beliefs and
appreciation of life. The folktales in Ogba for instance, serve similar purpose through their
rendition/performance. Through the stories, the younger generation in Ogba society is familiarised with the
customs, traditions, and rituals prevalent in the society. This paper therefore recommends the use of oral
literature in all its genres to inculcate moral values and lessons to the teenagers and youths. Against this
background, Ogba (African) themselves must cease to regard oral literature as primitive and fetish.
KEYWORDS: Values, Oral Literature, Society, Ogba, Folktales
Pormalistikong Pagdalumat sa mga Tula ni Ron CanimoAJHSSR Journal
ABSTRACT: Nilayon ng pag-aaral na ito na masuri ang dalawampung (20) tula ni Ron Canimo gamit ang
pormalistikong dulog batay sa mga sumusunod na elemento: (a) Sukat at Tugma, (b) Talinghaga at
Simbolismo, (c) Imahen, (d) Tema, at (e) Diksiyon. Layunin din nitong mataya ang antas ng pagtanggap ng
ginawang pagsusuri gamit ang nabuong instrumento sa pagtataya nito. Sinunod dito ang Input-Process-Output
na balangkas ng pag-aaral at ginamitan ng kwantitatib-deskriptib-ebalwatib na pamamaraan. Sa pamamagitan
ng talatanungang ibinatay sa ginamit ni Morales (2014) na naimodipika ayon sa kahingian ng kasalukuyang
pag-aaral, tatlong (3) gurong eksperto ang nagsilbing tagataya dito na siyang tumiyak sa kahusayan ng nabuong
pagsusuri ng mananaliksik. Gamit ang Content Analysis, natuklasan na makabagong pamamaraan ang istilo na
ginamit ni Ron Canimo sa pagsulat ng mga tula. Lahat ng kanyang mga tula ay walang sinusunod na sukat at
tugma, may iba‟t ibang tayutay at simbolismong ginamit, magkaibang pandama ang pinagana dahil sa mga
imahe at paglalarawang ginawa, iba‟t ibang uri ng pag-ibig ang tinalakay at gumamit ng pormal, impormal o
kumbersasyonal na wika at makabagong istilo sa pagsulat ng tula. Gamit ang mean at standard deviation,
lumabas na “Mataas” ang antas ng pagtanggap sa kabuuan ng mga gurong eksperto na tumaya sa nabuong
pagsusuri. Lumabas din na “Mataas” ang antas ng kanilang pagtanggap sa nabuong pagsusuri batay sa mga
sumusunod na elemento: (a) Sukat at Tugma, (b) Talinghaga at Simbolismo, (c) Imahen, (d) Tema, at (e)
Diksiyon. Mula sa natayang pagsusuri at kinalabasan ng antas ng pagtanggap dito, naitala ang mga paksa sa
Junior High School Filipino na maaaring lapatan at gamitan ng nabuong pagsusuri.
KEYWORDS: Kumbensyunal, Pagdalumat, Pormalistiko, Ron Canimo, Tula
SCHOOL CULTURE ADAPTATION AMONG INDIGENOUS PEOPLES COLLEGE STUDENTS AT A PRIV...AJHSSR Journal
ABSTRACT: This qualitative study investigates the adaption experiences of indigenous college students at the
University of Mindanao, Matina-main campus. Eight major themes emerged, including difficulties with language
proficiency, online learning, classroom interaction, examination systems, grading procedures, school regulations,
resource accessibility, coping mechanisms, and future goals. Implications include the requirement for targeted
language proficiency and technology use support, an understanding of adaption processes, interventions to
improve resource accessibility, and equitable public administration policies. The study underlines the importance
of adaptation in various educational contexts, as well as the role of educators and legislators in creating inclusive
learning environments.
KEYWORDS: indigenous college students, adaptation, educational challenges, coping strategies
The effect of Institutional Ownership, Sales Growth and Profitability on Tax ...AJHSSR Journal
ABSTRACT: This research aims to test, analyze and obtain empirical evidence about the influence of
institutional ownership, sales growth and profitability on tax avoidance. The object of this research is
manufacturing companies in the consumer goods industry sector listed on the Indonesia Stock Exchange (BEI)
in 2018-2022. This research used quantitative research methods and causal research design. The sampling
technique in this research used non-probability sampling with purposive sampling as the basis for determining
the sample so that a sample of 55 samples was obtained. The data used is secondary data obtained from the
official website of the Indonesia Stock Exchange (BEI) during the 2018-2022 period. The data analysis method
used was multiple linear regression analysis with several tests such as descriptive statistical tests, classical
assumption tests, and hypothesis testing using SPSS version 26 statistical software. The results showed that the
institutional ownership variable has no effect on tax avoidance, while the sales growth and profitability has a
negative and significant effect on tax avoidance.
KEYWORDS: Institutional Ownership, Sales Growth, Profitability, Tax Avoidance
Temple of Asclepius in Thrace. Excavation resultsKrassimira Luka
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Using The ECM Approach between Growth of the Current Account Balance and Foreign Exchange Reserve in Indonesia
1. American Journal of Humanities and Social Sciences Research (AJHSSR) 2019
A J H S S R J o u r n a l P a g e | 51
American Journal of Humanities and Social Sciences Research (AJHSSR)
e-ISSN : 2378-703X
Volume-03, Issue-10, pp-51-57
www.ajhssr.com
Research Paper Open Access
Using the ECM Approach between Growth of theCurrent
Account Balance and Foreign Exchange Reserve in Indonesia
Dewi Mahrani Rangkuty1
, Muhammad Hidayat2
1
(Economics Department, Universitas Pembangunan Panca Budi, Indonesia)
2
(Economics Department, Universitas Muhammadiyah Riau, Indonesia)
Corresponding author:Muhammad Hidayat
ABSTRACT: The aim of this research to analyze relationship equilibrium to the long-term and short-term
between the current account balance and foreign exchange reserve. As datum from the world bankstarts from
1982 until 2018, the used methodology Error Correction Model (ECM). The result of the estimate and analysis
were the current account balance and foreign exchange reserve stationary at level with the ADF test. The
variables had relationship equilibrium for the long-term and had one-way causality. That was the foreign
exchange reserve that causesthe current account balance. For the long-term, the current account balance had
positively and not significantly to change the development of the foreign exchange reserves. From the short-
term disequilibrium relationship to the equilibrium relationship, the current account balance had negatively and
not significantly too to change the development of the foreign exchange reserves.The value of the current
account balance of Indonesia has a deficit in some periods. Itwould have a bad impact on domestic foreign
exchange reserves. To the Government, the Ministry of Trade to keep the export performance to the stability of
the current account balance surplus to increase the Indonesian economic growth.
KEYWORDS : Foreign Exchange Reserve, Current Account Balance, ECM
I. INTRODUCTION
Indonesia as a developing country implementing an open economic system, export and import
activities become supporters in improving the economy. High export performance supports domestic production
to continuously improve distribution output in meeting the needs of the world. High export performance is
increasingly supporting the trade balance surplus so it impactsincreasing domestic foreign exchange reserves.
Management of a country's foreign exchange reserves began with the efforts to improve export
performance in the country. Foreign exchange reserves strongly affect the economic condition of a country in
the future. The value of high foreign exchange reserves able to control the country's economy in international
trade activities both in the real market and in the money market. Foreign exchange reserves can be in the form of
stocks of other countries and in gold reserves in the country.
Foreign exchange reserves are viewed by economic policymakers as ‘money in the bank’–the more, the
better. Reserves are a fundamental pillar of the macroeconomic toolkit. In countries that implement fixed or
partially fixed foreign exchange rate systems, they are used as a means to keep the exchange rate at or near the
official target or parity level. Beyond exchange rate stabilization, foreign exchange reserves are considered a
key indicator of the strength of an economy, particularly of its exporting and importing industries. Regarding
international trade, foreign exchange reserves are often a necessary requirement to finance imports of goods and
services. Finally, foreign reserves reveal the financial strength of a country. ‘Foreign exchange reserves are
particularly important in international trade because they facilitate international transactions and increase the
speed at which trade deals are finalized. Additionally, these reserves could contribute to the efficiency of
international supply chains[1].
The International Monetary Fund (IMF) defines foreign exchange reserves as the external stock of
assets that a country’s monetary authorities hold. They are composed of foreign banknotes, bank deposits in
foreign currencies, and foreign bonds, treasury bills, and other government securities[2].
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Fig. 1: The Current Account Balance and Foreign Exchange Rate, Period 2009-2018 (USD)
The figure above, about the ten years latest of the current account balance and foreign exchange reserve
in Indonesia. For the highest value of the current account balance in 2009 is US$ 10,628,489,686.08 but the
lowest in 2018 is negative US$ 31,050,512,052.22. And for the highest value of the foreign exchange reserve in
2017 is US$ 130,215,330.38but the lowest in 2009 is US$ 66,118,916.97. The surplus of the current account
balance could be helping the foreign exchange reserve improvements. The high value of the current account
balance as positively for the stability of the foreign exchange reserve point. But in 2012 until 2018, the value of
the current account balance as negative showed. That condition disturbed the stability of the foreign exchange
reserve domestic.
For any period, the current account balance of Indonesia is negative and so had fluctuation. That was a
problem for the foreign exchange reserve of domestic and so to international relationship Indonesia with other
countries in the world trade, like export and or import activities. This research has aimed to know short term
relationships and or long term equilibrium between the variables.
II. HEADINGS
In Indonesia, the arrangement of the institutions authorized to manage the foreign exchange reserves
shall be stipulated by the Law on Bank Indonesia No. 23 of 1999 as amended by Law No. 3 of 2004. Pursuant to
section 13 of the law, to Bank Indonesia in order to implement monetary policy is authorized to manage foreign
exchange reserves. In the management of foreign exchange reserves, Bank Indonesia can conduct various
foreign exchange transactions and can receive loans[3].
The purpose of the management of foreign exchange reserves is to (1) support monetary policy which is
an integral part of the policy of maintaining the exchange rate, (2) assisting the Government to pay the foreign
debt in a timely manner, and (3) financing Import activities in order to support economic activities in the
country.
The principle that is the basis of Bank Indonesia in managing and maintaining foreign exchange reserves
is security and readiness to fulfill obligations immediately without neglecting the principle to obtain an optimal
income. In managing the foreign exchange reserves, Bank Indonesia shall seek to keep the reserves of the
maintained amount to be sufficient to enforce the monetary policy.
The current account defined as the sum of net exports of goods and services and unrequited transfers
balances can be derived via the national income accounts, as well. The latter shows the main relationship
between current account balance and capital flows and can be calculated with the help of the difference between
private savings minus private investments and government spending minus tax revenues[4].
The current account also offers information about the competitive structure of the balance of a country.
For instance, a country importing more than it exports can be considered to be relatively less competitive in
international markets. Especially, in those among European Union member countries, which are non-
competitive in foreign markets, the balance of payments deficits could not be overcome through increases in
exchange rate depending on the use of fixed exchange rates and thus the imbalances that may occur in external
FER
CAB
-4E+10
-3E+10
-2E+10
-1E+10
0
1E+10
2E+10
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
USD
Year
The Current Account Balance and Foreign Exchange Rate,
Period 2009-2018 (USD)
FER CAB
3. American Journal of Humanities and Social Sciences Research (AJHSSR) 2019
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payments are more damaging to the country’s economy. Another important point to take into consideration
carefully in this regard is how these deficits are financed. In case a country having this deficit is attractive to
direct foreign investment, without the need for a change in the exchange rate, these deficits can be funded by the
help of direct foreign investment. But, the capital coming to the country in this way buys assets and thus one
owner of a larger proportion of the assets in the country passes into the hands of foreigners. If these deficits are
funded more short-term capital, in case of any crisis, it causes a deepening of the crisis by outflowing.
Therefore, these deficits’ being permanent points to the financial fragility of those countries[5].
Because of the current account balance has a major contribution to foreign exchange reserves in
Indonesia, it is important to know how the current account balance relationship in the short term or long term
between those variables for the period.
III. INDENTATIONS AND EQUATIONS
This research has time series datum from the website of worldbank and the period was 1982 until 2018,
and analyze for the relation of equilibrium for long termthen correction for the short term disequilibrium with
Error Correction Model (ECM), then to know causality between the variables. The step of a method for this
research as follows:
1. Unit Root Test
In this step, the Unit Root test uses the Augmented Dickey-Fuller (ADF) method, to know stationarity or
not for every variable of estimates. The Formula of the ADF test as follows:
𝐷𝑌𝑡 = 𝑎0 + 𝛾𝑌𝑡−1 + 𝛽𝑖 𝐷𝑌𝑡−1+1 + 𝜀𝑡
𝜌
𝑖=1 ................................................................................................. (1)
Hypothesis null in this test was H0: γ=0. Datum has said stationary with comparison statistics of
MacKinnon. The criteria were if the number of |ADFstat| > critical number of MacKinnon or Prob.*t-statistics <
0.05 then the datum was stationary and the other way then the datum was not stationary.
2. Cointegration Test
In this step, the cointegration test for analyzing cointegration or relation of equilibrium for long term
between the variables. The method is the Johansen test. This method had required to do with two statistic tests.
That is, the trace (λtrace) test for Hypothesis Null test had required an amount of cointegration direction is ≤ρ.
The formula as follows:
𝜆𝑡𝑟𝑎𝑐𝑒 𝑟 = −𝑇 𝑖𝑛(1 − 𝜆𝑖)
𝜌
𝑖=𝑟+𝑖 ............................................................................................................ (2)
The amount λr + 1, ... λn is the least of eigenvectors (ρ- r). Hypothesis null has used that is the sum of the same
cointegration direction with r. And the result of cointegration vector ≤ r, where r = 0, 1, 2 and beyond.
The next for the second statistics test, with the formula as follows to know the number of eigenvalues (λmax)
maximum:
𝜆 𝑚𝑎𝑥 = 𝑟, 𝑟 + 1 = −𝑇 𝑖𝑛(1 − 𝜆 𝑟+1) ..................................................................................................... (3)
To know there or not cointegration relation between the variables, that is seen from the ratio of Trace
Statistics and Max-Eigen Statistics value with the critical value of α=0.05.
3. Causality Test
In this step, to know there or no relation of one way, two way between the variables used the formula as
follows:
𝑋𝑡 = 𝑎𝑖 𝑋𝑡−𝑖 + 𝑏𝑗 𝑌𝑡−𝑗 − 𝜇𝑡
𝑛
𝑗=𝑖
𝑚
𝑖=1 ........................................................................................................ (4)
𝑌𝑡 = 𝑐𝑖 𝑋𝑡−𝑖 + 𝑑𝑗 𝑌𝑡−𝑗 − 𝑣𝑡
𝑠
𝑗=1
𝑟
𝑖=1 ......................................................................................................... (5)
Where μt and Vt showed error terms assume there is no serial correlation, and m = n = r = s. By the
result of estimation from the equation model (4), (5) shows 4 related possibilities of coefficient regression value
from that equations as follows:
1 𝑖𝑓 𝑏𝑗 ≠ 0 𝑎𝑛𝑑 𝑑𝑗 = 0,
𝑠
𝑗 =1
𝑛
𝑗=1
There the causality one way between the variables Y to X.
2 𝑖𝑓 𝑏𝑗 = 0 𝑎𝑛𝑑 𝑑𝑗 ≠ 0,
𝑠
𝑗 =1
𝑛
𝑗=1
There the causality one way between the variables X to Y.
4. American Journal of Humanities and Social Sciences Research (AJHSSR) 2019
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3 𝑖𝑓 𝑏𝑗 = 0 𝑎𝑛𝑑 𝑑𝑗 = 0,
𝑠
𝑗 =1
𝑛
𝑗=1
There does not the causality between the variable X and Y (variable X and Y has exogen each other).
4 𝑖𝑓 𝑏𝑗 ≠ 0 𝑎𝑛𝑑 𝑑𝑗 ≠ 0,
𝑠
𝑗 =1
𝑛
𝑗=1
There the causality two way between the variables Y and X.
The next with strengthening indications causality form, have to do Ftest for every regression model.
4. Error Correction Model (ECM)
Techniques for correcting short-term disequilibrium to long-term relationship equilibrium called Error
Correction Model (ECM), were first used by Sargan and popularized by Engle and Granger (Pratomo dan
Hidayat, 2010). ECM model to know the influence of the current account balance to foreign exchange reserve as
follows:
∆FER = β0 + β1∆CAB+ β2µt-1 + Ɛt ............................................................................................................. (6)
where:
∆ : first difference
FER : the foreign exchange reserve
β0, β1, β2 : coefficient
CAB : the current account balance
µt-1 : residual previous period
Ɛ : random error term
t : time
In the ECM model above shows∆FER influenced by ∆CAB and equilibrium error term. If the equilibrium
error term had zero value, so that model would not be in a state of equilibrium.In the ECM model, the absolute
value of β2shows how fast the balance can be achieved again.
IV. FIGURES AND TABLES
A deficit of the current account balance as special attention to the Government of Indonesia, especially in
the Ministry of Trade to save and increase the current account balance surplus for each period for domestic of
the foreign exchange reserve. Following the datum of the growth of Indonesia the current account balance and
foreign exchange reserve from 1982 until 2018.
Fig. 2: The Growth of The Current Account Balance and Foreign Exchange Rate, Period 1982-2018 (%)
5. American Journal of Humanities and Social Sciences Research (AJHSSR) 2019
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Over the last thirty-seven years from 1982 to 2018 the growth of the current account balance and foreign
exchange reserve have fluctuated. For the highest value of the growth, the current account balance in 2009 is
8335.82 percent and the lowest in 2012 is negative 1549.07 percent. For the highest value of the growth, the
foreign exchange reserve in 2010 is 45.51 percent and the lowest in 1982 is negative 26.97 percent. The current
account balance value phenomenon that tends to negatively provide an insufficient good impact on the
development of Indonesia's foreign exchange reserves.
To know relationship disequilibrium for the short term to long term relationship equilibrium between the
variables, then the result by step in this research are as follows:
1. Unit Root Test
For the Unit Root Test used the Augmented Dickey-Fuller (ADF) test type for the stationary data. The
result of unit root test as follows:
Table1: Unit Root Test with ADF Test Type
Variables ADF test statistic
Level
t-Statistic Prob.*
FER -7.129784 -2.945842 0.0000
CAB -6.177929 -2.945842 0.0000
Source: Unit Root test; Eviews v. 10; 2019
The result of the unit root test known the FER and CAB were stationary at Level. The Prob.* valueof the
both variable is 0.0000 <α = 0.05.
2. Cointegration Test
For the cointegration test used the Johansen method. This test to known relation equilibrium for long
term between the variables. The result of the cointegration test as follows:
Table2:Cointegration test Johansen Method
Unrestricted Cointegration Rank Test (Trace)
Hypothesized No. of
CE(s)
Eigenvalue Trace Statistic 0.05
Critical Value
Prob.**
None * 0.580561 43.43316 15.49471 0.0000
At most 1 * 0.310722 13.02389 3.841466 0.0003
Trace test indicates 2 cointegrating eqn(s) at the 0.05 level
*denotes rejection of the hypothesis at the 0.05 level
**MacKinnon-Haug-Michelis (1999) p-values
Unrestricted Cointegration Rank Test (Maximum Eigenvalue)
Hypothesized No. of
CE(s)
Eigenvalue Max-Eigen
Statistic
0.05
Critical Value
Prob.**
None * 0.580561 30.40928 14.26460 0.0001
At most 1 * 0.310722 13.02389 3.841466 0.0003
Trace test indicates 2 cointegrating eqn(s) at the 0.05 level
*denotes rejection of the hypothesis at the 0.05 level
**MacKinnon-Haug-Michelis (1999) p-values
Source: Cointegration test Johansen Method; Eviews v. 10; 2019
Had known for cointegration test had a relation equilibrium for the long term in the period, trace statistic
> 0.05 critical value and max-eigen statistic >0.05 critical value.
3. Causality Test
For the causality test used the Granger Causality test. This test to known the causality one and or two
way between the variables for FER and CAB. The result of the causality test as follows:
Table3:Granger Causality Test FER and CAB on Lags 2, 4
Pairwise Granger Causality Tests
Sample: 1982 2018
Lags: 2
Null Hypothesis: Obs F-Statistic Prob.
CAB does not Granger Cause FER
FER does not Granger Cause CAB
35 8.48722
1.64180
0.0012
0.2106
Source: Granger Causality test; Eviews v. 10; 2019
Pairwise Granger Causality Tests
Sample: 1982 2018
Lags: 4
Null Hypothesis: Obs F-Statistic Prob.
CAB does not Granger Cause FER
FER does not Granger Cause CAB
33 5.04864
0.72841
0.0043
0.5813
Source: Granger Causality test; Eviews v. 10; 2019
6. American Journal of Humanities and Social Sciences Research (AJHSSR) 2019
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The results are the current account balance and foreign exchange reserveon lags 2 and 4 had the causality
one way. It means the current account balance not cause a foreign exchange reserve but the foreign exchange
reserve causes current account balance.
4. Error Correction Model (ECM)
To know the long term equation of this research, the result of the estimate as follows:
Table4: Estimate for The Long Term
Dependent Variable: FER
Method: Least Squares
Sample: 1982 2018
Included observations: 37
Variable Coefficient Std. Error t-Statistic Prob.
SER01 0.043520 0.249664 0.174313 0.8627
CAB 0.002148 0.001771 1.212838 0.2336
C 8.006937 5.412896 1.479234 0.1483
R-squared 0.043900 Mean dependent var 9.488010
Adjusted R-squared -0.012342 S.D. dependent var 16.03067
S.E. of regression 16.12929 Akaike info criterion 8.476756
Sum squared resid 8845.236 Schwarz criterion 8.607371
Log likelihood -153.8200 Hannan-Quinn criter. 8.522803
F-statistic 0.780558 Durbin-Watson stat 2.179448
Prob(F-statistic) 0.466187
Source: Estimate for the long term; Eviews v. 10; 2019
And so the equation for the long term as follows:
FERt = 8.007 + 0.0435t + 0.0021CABt ..................................................................................................... (7)
Next, for a result the unit root test of residual as follows:
Table5: Unit Root Test Residual with ADF Test Type
Variables ADF test statistic t-Statistic Prob.*
RESID01 -7.654208 -2.945842 0.0000
Source: Unit Root test; Eviews v. 10; 2019
Next, for a result the estimate of ECM as follows:
Table5: Estimate of ECM
Dependent Variable: D(FER)
Method: Least Squares
Sample: 1983 2018
Included observations: 36 after adjustments
Variable Coefficient Std. Error t-Statistic Prob.
D(CAB) -0.000422 0.001022 -0.412866 0.6824
RESID01(-1) -1.256327 0.146750 -8.561010 0.0000
C 1.107659 2.232978 0.496045 0.6232
R-squared 0.692808 Mean dependent var 0.545459
Adjusted R-squared 0.674191 S.D. dependent var 23.46181
S.E. of regression 13.39194 Akaike info criterion 8.106838
Sum squared resid 5918.350 Schwarz criterion 8.238798
Log likelihood -142.9231 Hannan-Quinn criter. 8.152895
F-statistic 37.21239 Durbin-Watson stat 2.100149
Prob(F-statistic) 0.000000
Source: Estimate of ECM; Eviews v. 10; 2019
And the equation for the short term as follows:
∆FER = 1.1077 – 0.0004 ∆CABt– 1.2563ut-1 ............................................................................................. (8)
As a statistic, the ECM value is significant. It shows FER adjust CAB with one lag, and or with other
words approximately 125.63 percent from incompatibility between for long and short term for corrected as long
as one year. As known, the elasticity of the short term for the CAB variable is 0.0004. Whereas the elasticity of
long term for CAB variable is 0.0021 as the equation (7).In the short term, the current account balance had not
7. American Journal of Humanities and Social Sciences Research (AJHSSR) 2019
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significant but negatively influenced the Indonesia exchange reserve with Prob. value 0.6824 >α = 0.05.And in
the long term, the current account balance had not significant too but positively influenced the Indonesia
exchange reserve with Prob. value 0.2336 >α = 0.05. On the basis of the theory, the higherthe current account
balance would be increasing the number of Indonesian foreign exchange reserves.
Indonesia's foreign exchange reserves are sourced from net exports be said to be the current account
balance, gold reserves, and foreign debt. High net export value, high enough country gold reserves and minimal
foreign debt will support the country's economy in a better direction towards a significant economic growth rate
towards development Indonesia as a measure of community welfare. However, in fact, the net export condition
of Indonesia for 37 years indicates the rate of growth fluctuates with a negative value in some period. This is
what affects Indonesia's foreign exchange reserves because foreign debt as a long-term component of its
development is not good enough would be increasing the rate of economic growth. Therefore, the results of the
study showed that in the short-term net export is negatively influential but not significant to the change in the
development of foreign exchange reserves to equilibrium. While in the long term net exports have a positive
effect but not significant changes in the development of foreign exchange reserves. The condition is not
significant to change the development of the foreign exchange reserves due to the value of the Indonesian net
exports itself is a dominant deficit in a few years in the period of this research.
V. CONCLUSION
The current account balance and foreign exchange reserve had one-way causality, it was the foreign
exchange reserve cause current account balance but the current account balance did not cause foreign exchange
reserve. Between the variables had relationship equilibrium for the long term and for short-term as error
equation model estimation known to relationship equilibrium, the current account balance had negatively and
not significantly influenced to change the development of foreign exchange reserve for the periods. So, in the
long-term, the current account balance had positively and not significantly influenced to change the
development of Indonesia’s foreign exchange reserve.
This situation describes that Indonesia's foreign exchange reserves affect the current account balance,
not the current account balance that affects to change the development of the number of foreign exchange
reserves. A small contribution from the current account balance to the foreign exchange reserves caused the
current account balance to be unable to support an increase in the number of Indonesian foreign exchange
reserves to a much higher value. So it can be concluded that Indonesia's foreign exchange reserves are not
largely sourced from the current account balance, but from the number of gold reserves even the addition of
foreign debt. This is a special concern for governments especially the Ministry of Trade to continue attending to
the trend of our net export performance in international markets in an effort to increase the current account
balance surplus and keep the stability of the rupiah exchange rate go into high economic growth.
VI. ACKNOWLEDGMENTS
Thanks to all the partners who have helped me in completing this paper.
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