ASYMMETRICAL EXCHANGE RATES EFFECT ON INDONESIA'S TRADE BALANCE IN TOURISM
Oleh : Akbar Maulana
PEMBIMBING 1 : DR. T. Zulham, S.E., M.Si
PEMBIMBING 2 : DR. Taufiq C Dawood, S.E., M.Ec.Dev
The main objective of this research is to see the effect of depreciation and real exchange rate appreciation on Indonesia's trade balance bilaterally against Australia, China, Japan, Malaysia, and Singapore where bilateral relations have never been studied for emerging markets countries, namely Indonesia. This study uses a linear ARDL approach and a nonlinear ARDL approach with the dependent variable on the tourism trade balance and the real exchange rate as independent variables. Income, foreign direct investment (FDI), and natural disasters as control variables. The empirical results show that Chinese and Japanese tourists respond positively to the depreciation of the real exchange rate, thereby increasing Indonesia's tourism trade balance. Nonlinier ARDL shows that the relationship between the real exchange rate and the trade balance is not symmetrical with respect to China and Japan, while Australia, Malaysia, and Singapore are symmetrical. These results indicate that the government can make policies to increase tourist arrivals from China and Japan. Further empirical results also found the J curve pattern in Indonesia-China and Indonesia-Japan.
Keywords : Tourism Trade Balance, Real Exchange Rate, Nonlinier ARDL, J-curve