Proceedings of the Sixth Padang International Conference On Economics Education, Economics, Business and Management, Accounting and Entrepreneurship (PICEEBA 2020)

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Analysis of the Effectiveness of Monetary Policy Transmission Through the Exchange Rate Channel in Maintaining Price Stability in Emerging Market Countries

Authors
Nuraisyah Jamar, Hasdi Aimon
Corresponding Author
Nuraisyah Jamar
Available Online 17 June 2021.
DOI
10.2991/aebmr.k.210616.037How to use a DOI?
Keywords
Effectiveness, Monetary Policy Transmission, Exchange Rate, Price Stability, Vector Error Correction Model (VECM), Emerging Markets
Abstract

This study aims to determine the effectiveness of monetary policy transmission through the exchange rate channel in influencing price stability. This type of research is associative research. Sources of data are secondary data and data in the form of time series 1 quarter 2010 - 4 quarter 2018. The model analysis tool used is the Vector Error Correction Model (VECM). The results of the research estimate based on these indicators show that the Brazilian State exchange rate pathway has not been effective in influencing inflation as evidenced by the weak influence of the exchange rate variable on inflation, only 5.28%. The Philippines, the exchange rate path has been effective in influencing inflation as evidenced by the strong influence of the exchange rate variable on inflation, namely 5.38%. The Indonesian state, the exchange rate pathway has been effective in influencing inflation as evidenced by the strong influence of the exchange rate variable on inflation, namely 3.25%,. Based on the VECM estimation results, in Brazil and the Philippines there is a short and long term relationship, while in Indonesia there is a long term relationship. In Brazil, the short and long term relations are described in time lag 4, in Indonesia the long and short term relationships created between each variable in the monetary policy transmission channel through the exchange rate channel are described in time lag 1 and the Philippines at time lag 1. The interest rate channel is found to be the most dominant channel of monetary policy transmission in Brazil.

Copyright
© 2021, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the Sixth Padang International Conference On Economics Education, Economics, Business and Management, Accounting and Entrepreneurship (PICEEBA 2020)
Series
Advances in Economics, Business and Management Research
Publication Date
17 June 2021
ISBN
978-94-6239-393-6
ISSN
2352-5428
DOI
10.2991/aebmr.k.210616.037How to use a DOI?
Copyright
© 2021, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

risenwbib
TY  - CONF
AU  - Nuraisyah Jamar
AU  - Hasdi Aimon
PY  - 2021
DA  - 2021/06/17
TI  - Analysis of the Effectiveness of Monetary Policy Transmission Through the Exchange Rate Channel in Maintaining Price Stability in Emerging Market Countries
BT  - Proceedings of the Sixth Padang International Conference On Economics Education, Economics, Business and Management, Accounting and Entrepreneurship (PICEEBA 2020)
PB  - Atlantis Press
SP  - 252
EP  - 261
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.210616.037
DO  - 10.2991/aebmr.k.210616.037
ID  - Jamar2021
ER  -