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Resilience of Indonesia’s Trade Balance to Short-Term Exchange Rate and Inflation Dynamics Panjaitan, Andreas; Sabila, Suny; Anisa, Septri; Hutagalung, Debora Silvia; Karo, Artha Putri Br
Economic: Journal Economic and Business Vol. 4 No. 4 (2025): ECONOMIC: Journal Economic and Business
Publisher : Lembaga Riset Mutiara Akbar (LARISMA)

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.56495/ejeb.v4i4.1300

Abstract

Indonesia's trade balance is often considered vulnerable to exchange rate fluctuations and inflation, but in reality, the period from January 2023 to December 2024 showed a surprising pattern. This study uses a quantitative approach with multiple linear regression on monthly data from Bank Indonesia and Statistics Indonesia to examine the short-term effects of the exchange rate and inflation. The results show that neither is significantly affected. Despite a moderate depreciation of the rupiah and a decline in inflation to its lowest level in history, the trade balance remains in surplus. This finding challenges the common assumption that short-term macroeconomic fluctuations determine trade performance and reveals that structural external factors such as global commodity prices and trading partner demand play a more dominant role. This study emphasizes the need for innovative sector-based trade strategies beyond conventional monetary instruments to maintain external stability.