Analyzing the influence of Export and Import on the Foreign Exchange Reserves of Indonesia from 1997 to 2018

Abstract

Like humans as social beings, countries need one another to satisfy their needs as they cannot produce nor have all of the required resources. One of the forms of that symbiosis is international trade, in which the foreign currencies are used as the means of payment. Those foreign currencies then become one of the elements of International Foreign Exchange Reserves. This study aimed at analyzing the influence of export and import on the International Foreign Exchange Reserves of Indonesia. Data analyzed in this study were secondary data sourced from Indonesia's National Statistics Bureau and Bank of Indonesia and picked with the purposive sampling method. It included the export, import, and International Foreign Exchange Reserves of Indonesia data from 1997 to 2018. Besides, data were analyzed using the Linear Multiple Regression with the Classical Assumption tests, Validity and Reliability tests (F-test, t-test, Coefficient Determination), and model interpretation. Eventually, the results concluded that both independent variables (Export and Import) simultaneously and partially affected the dependent variable (Foreign Exchange Reserves).