Analysis of The Influence Rupiah Exchange Rate on Economic Growth in Indonesia

Abstract

Economic growth as a benchmark of achievement of economic activity in Indonesia in obtaining additional income for its people from one period to the next. As a result of the Covid-19 pandemic, Indonesia's economic growth and even the world has experienced a setback. Therefore, the Indonesian state made various efforts to increase economic growth. Currency stability is the key to accelerating the pace of economic growth in any country. The purpose of this study is to analyze the short-and long-term effects of the rupee exchange rate on Indonesia's economic growth. The data used in this study are secondary time series data for Bank Indonesia Q1 2011-Q2 2021. The analysis method used in this study is ECM (Error Correction Model). The results showed that in the short term, the rupiah exchange rate had a significant positive impact on economic growth and the Covid 19 dummy had a significant negative impact on economic growth. In the long run, the rupiah exchange rate and the Covid19 dummy will not have a significant impact on Indonesia's economic growth.