The role of imports, exchange rates, and reserve stability in driving Indonesia’s export performance
DOI:
https://doi.org/10.12928/optimum.v16i1.15536Keywords:
Export Performance, Import, Exchange Rate, Foreign Exchange ReserveAbstract
Indonesia’s export performance is shaped by various macroeconomic factors that represent both the country’s production capabilities and broader external economic conditions. This study explores how exchange rates, imports, and foreign exchange reserves influence Indonesia’s export activities. In contrast to many earlier studies that examined these variables individually, this research brings them together in one empirical framework to better understand their joint impact on export performance. The analysis is based on annual time-series data from 1995 to 2024, sourced from the World Bank database. The Autoregressive Distributed Lag (ARDL) model is applied to identify both short-run dynamics and long-run relationships among the variables. Prior to estimation, several econometric procedures are conducted, including unit root testing, optimal lag selection based on the Akaike Information Criterion, bounds testing for cointegration, and diagnostic tests to ensure model reliability. The empirical findings indicate that imports have a positive and statistically significant impact on Indonesia’s exports in both the short term and the long term. Meanwhile, the exchange rate does not appear to have a significant direct influence on export performance. Foreign exchange reserves, on the other hand, show a positive relationship with exports, although the statistical strength of this effect is relatively weaker. Overall, these results suggest that ensuring the availability of imported production inputs and maintaining macroeconomic stability are important factors in supporting sustainable export growth in Indonesia.
References
Adler, G., Lisack, N., & Mano, R. C. (2019). Unveiling the effects of foreign exchange intervention: A panel approach. Emerging Markets Review, 40, 100620. https://doi.org/10.1016/j.ememar.2019.100620
Agénor, P.-R., Jackson, T. P., & Pereira da Silva, L. A. (2025). Foreign exchange intervention and financial stability. Journal of International Money and Finance, 160, 103439. https://doi.org/10.1016/j.jimonfin.2025.103439
Ahmed, R., Aizenman, J., & Jinjarak, Y. (2021). Inflation and exchange rate targeting challenges under fiscal dominance. Journal of Macroeconomics, 67, 103281. https://doi.org/10.1016/j.jmacro.2020.103281
Ahmed, R., Aizenman, J., Saadaoui, J., & Uddin, G. S. (2023). On the effectiveness of foreign exchange reserves during the 2021-22 U.S. monetary tightening cycle. Economics Letters, 233, 111367. https://doi.org/10.1016/j.econlet.2023.111367
Apaitan, T., Manopimoke, P., Nookhwun, N., & Pattararangrong, J. (2024). Heterogeneity in exchange rate pass-through to import prices in Thailand: Evidence from Thailand. Journal of International Money and Finance, 149, 103196. https://doi.org/10.1016/j.jimonfin.2024.103196
Aprilia, R., & Malia, R. (2022). Balance of payments and exchange rates in ASEAN countries: Granger causality test. Optimum: Jurnal Ekonomi Dan Pembangunan, 12(1), 1-15. https://doi.org/10.12928/optimum.v12i1.4357
Bussière, M., & Peltonen, T. (2008). Exchange rate pass-through in the global economy the role of emerging market economics. Working Paper Series No 951. European Central Bank. Frankurt. https://doi.org/10.2139/ssrn.1313045
Casas, C. (2020). Industry heterogeneity and exchange rate pass-through. Journal of International Money and Finance, 106, 102182. https://doi.org/10.1016/j.jimonfin.2020.102182
Dai, M., Nucci, F., Pozzolo, A. F., & Xu, J. (2021). Access to finance and the exchange rate elasticity of exports. Journal of International Money and Finance, 115, 102386. https://doi.org/10.1016/j.jimonfin.2021.102386
Dainauskas, J. (2023). Time-varying exchange rate pass-through into terms of trade. Journal of International Money and Finance, 137, 102925. https://doi.org/10.1016/j.jimonfin.2023.102905
Dewi, L. G. K., Widiasa, K. A. P., & Dewi, N. L. P. S. (2025). The effect of foreign exchange rate changes on Indonesia's import-export values. Journal of Business and Management, 5(1), 25-33. https://doi.org/10.52432/justbest.5.1.25-33
Dinul, A. A., & Kurniawan, M. L. A. (2024). Analisis variabel makroekonomi terhadap utang luar negeri Indonesia: Pendekatan VAR. Modus, 36(2), 266-281. https://doi.org/10.24002/modus.v36i2.8910
Ferreira, A., Gozluklu, A., & Mainente, J. (2025). Central bank reserves and currency volatility. Open Economies Review. https://doi.org/10.1007/s11079-025-09837-1
Han, K., Kong, M., Xu, Q., & Zhou, J. (2025). Exchange rate contagion and international trade: Insights from the TENET method. Journal of International Money and Finance, 160, 103471. https://doi.org/10.1016/j.jimonfin.2025.103471
Hansen, T., & Suroso, A. I. (2023). The determinant, efficiency, and potential of Indonesian palm oil downstream export to the global market. Cogent Economics & Finance, 11(1). https://doi.org/10.1080/23322039.2023.2189671
Ibrahim, K. H., Handoyo, R. D., Dwi Kristianto, F., Kusumawardani, D., Ogawa, K., Azlan Shah Zaidi, M., Erlando, A., Haryanto, T., & Sarmidi, T. (2024). Exchange rate volatility and COVID-19 effects on Indonesia's food products trade: Symmetric and asymmetric approach. Heliyon, 10(12). https://doi.org/10.1016/j.heliyon.2024.e32611
Jalunggono, G., Cahyani, Y. T., & Juliprijanto, W. (2020). Pengaruh ekspor, impor dan kurs terhadap cadangan devisa Indonesia periode tahun 2004-2018. Jurnal Ekonomi, Bisnis, Dan Akuntansi, 22(2), 171-181. https://doi.org/10.32424/jeba.v22i2.1593
Kumar, K. S., Prabheesh, K. P., & Gunadi, I. (2026). Unravelling the factors behind Indonesia's international exchange reserves. Journal of Asian Economics, 102, 102105. https://doi.org/10.1016/j.asieco.2025.102105
Kurniawan, M. L. A., & A'yun, I. Q. (2022). Dynamic analysis on export, FDI and growth in Indonesia: An Autoregressive Distributed Lag (ARDL) model. Journal of Economics, Business, & Accountancy Ventura, 24(3), 350-362. https://doi.org/10.14414/jebav.v24i3.2717
Lal, M., Kumar, S., Pandey, D. K., Rai, V. K., & Lim, W. M. (2023). Exchange rate volatility and international trade. Journal of International Trade, 167. https://doi.org/10.1016/j.jbusres.2023.114156
Makore, I., & Chikutuma, C. N. (2025). Exchange rate volatility and its impact on international trade: Evidence from Zimbabwe. Journal of Risk and Financial Management, 18(7), 376. https://doi.org/10.3390/jrfm18070376
Montoro, C., & Ortiz, M. (2023). The portfolio balance channel of capital flows and foreign exchange intervention in a small open economy. Journal of International Money and Finance, 133, 102825. https://doi.org/10.1016/j.jimonfin.2023.102825
Msomi, S., & Muzindutsi, P.-F. (2025). Exchange rates, supply chain activity/disruption effects, and exports. Forecasting, 7(1), 10. https://doi.org/10.3390/forecast7010010
Nabilah, R. S., Kurniawan, M. L. A., & Purna, F. P. (2025). Determinant of macroeconomic variables on foreign exchange reserves in Indonesia. INCOME: Innovation of Economics and Management, 4(3), 105-111. https://doi.org/10.32764/income.v4i3.5636
Nusriona, N., Rahim, M., & Ariani, W. O. R. (2026). Pengaruh kurs dan pasokan uang terhadap ekspor di Indonesia. Halu Oleo International Conference on Economic and Business (HOICEB 2025), 5, 232-240.
Pinzon-Puerto, F., & Villamizar-Villegas, M. (2025). Foreign exchange intervention: A comparative analysis of announcements versus trades. European Economic Review, 178, 105119. https://doi.org/10.1016/j.euroecorev.2025.105119
Sitorus, E., Nopeline, N., & Purba, E. F. (2025). Hubungan ekspor, kurs rupiah, dan inflasi terhadap cadangan devisa Indonesia. Journal Economic and Strategy, 6(2).
Sugiharti, L., Esquivias, M. A., & Setyorani, B. (2020). The impact of exchange rate volatility on Indonesia's top exports to the five main export markets. Heliyon, 6(1), e03141. https://doi.org/10.1016/j.heliyon.2019.e03141
Suripto, S., Athfal, A. A., Kurniawan, M. L. A., & Salim, A. (2025). Structural cointegration of exchange rate, gross domestic product, and external debt in Indonesia: An analysis of macroeconomic stability with the ARDL-ECM approach. Ekuilibrium: Jurnal Ilmiah Bidang Ilmu Ekonomi, 20(2), 271-294. https://doi.org/10.24269/ekuilibrium.v20i2.2025.pp271-294
Syahmiyanti, K., & Soebagyo, D. (2023). Analisis faktor-faktor yang mempengaruhi cadangan devisa di Indonesia tahun 2006-2021. Primanomics: Jurnal Ekonomi & Bisnis, 21(1), 71-81. https://doi.org/10.31253/pe.v21i1.1750
Tampubolon, A., Hou, A., & Sakuntala, D. (2024). The impact of exchange rate, inflation and interest rates on Indonesian mining product exports. Jurnal Ekonomi, 13(3), 803.
Taqiyya, F. F., Sudarsono, H., & Perdana, A. R. A. (2025). Examining the contribution of Islamic bank to Indonesia economic growth. Optimum: Jurnal Ekonomi Dan Pembangunan, 15(2), 174-186. https://doi.org/10.12928/optimum.v15i2.12395
Urgessa, O. (2023). Effects of real effective exchange rate volatility on export earnings in Ethiopia: Symmetric and asymmetric effect analysis. Heliyon, 10(1). https://doi.org/10.1016/j.heliyon.2023.e23529
Wang, Y., & Yu, M. (2021). Imports and RMB exchange rate pass-through: The role of quality sorting. Journal of Economic Behavior and Organization, 187, 470-487. https://doi.org/10.1016/j.jebo.2021.04.039
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Azmi Fawwaz Syahrullah, Adang Djatnika Effendi, Herry Sutanto
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
