Factors Affecting the Exchange Rate of the Indonesian Rupiah Against the United States Dollar: January 2013 - December 2023

Yusril Rahman Hakim (Universitas Negeri Surabaya)
Tony Seno Aji (Universitas Negeri Surabaya)

Formosa Journal of Multidisciplinary Research (FJMR)
Vol. 4 No. 5 (2025): May 2025

This study examines factors affecting the Rupiah–US Dollar exchange rate from Jan 2013 to Dec 2023. Using monthly data from Bank Indonesia and Investing.com, the researchers apply the Autoregressive Distributed Lag (ARDL) model to capture both short and long run dynamics among inflation, money supply (M2), the BI Rate, and world crude oil prices (WTI). Findings indicate that higher inflation leads to Rupiah appreciation, whereas increases in money supply and the BI Rate cause depreciation in both horizons; WTI prices have a significant negative effect only in the short term. These results underscore the need for balanced monetary policy controlling inflation and managing liquidity and diversified foreign-exchange sources to uphold Rupiah stability amid shocks and inform targeted policy decisions.