The Nexus between Indonesia's Exchange Rate and the World Crude Palm Oil Price

• Autorzy: Cheng-Wen Lee , Andrian Dolfriandra Huruta
• Języki publikacji: EN

Abstrakty

EN

Objective: International trade plays a major role in increasing the output of each country. Crude Palm Oil (CPO) is one of Indonesia's major export commodities. Facts show over the past two decades, CPO has become a fast-growing product. However, there are obstacles from one of Indonesia's CPO importers, namely the European Union. The aim of this study is to explore the nexus between the exchange rate and the world price of CPOs.
Research Design & Methods: This study uses both the exchange rate of Indonesia and the price data of the world CPO from 1981-2017 as secondary. Granger Causality was used to explain the nexus between the exchange rate and the world price of CPOs.
Findings: The results of the Granger Causality showed there was no causality between the exchange rate and the price of the world CPO. The lack of causality between the two variables suggests the trade balance's position is stronger and able to explain the ex-change rate.
Contribution & Value Added: This study indicated that the IDR exchange rate is more sensitive to trade balance rather than the world CPO price. Moreover, It is necessary to refined palm oil products to increase the contribution of the non-oil sector in Indonesia. In addition, the Indonesian government needs to be aware of the European Union's raised barriers to world trade. It means that Indonesia can make a positive campaign about the ad-vantages of palm oil production. (original abstract)

Słowa kluczowe

EN

International trade; Vegetable oils; Exchange rates; Granger casuality

PL

Handel międzynarodowy; Oleje roślinne; Kurs walutowy; Przyczynowość w sensie Grangera

• Czasopismo: International Entrepreneurship Review
• Rocznik: 2019
• Tom: 5
• Numer: nr 3
• Strony: 35--47

Twórcy

autor

Cheng-Wen Lee

• Chung Yuan Christian University, Taiwan

autor

Andrian Dolfriandra Huruta

• Chung Yuan Christian University, Taiwan, PhD student

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Identyfikatory

DOI

10.15678/IER.2019.0503.03