Long-Term Impact of Inflation and Macroeconomic Variables on
Foreign Exchange Reserves in the Organization of Islamic
Corporation
HERU WAHYUDI
Economic Development, Faculty of Economics and Business, University of Lampung,
Jln. H. Komarudin, Rajabasa Raya, Rajabasa, Bandar Lampung,
INDONESIA
I WAYAN SUPARTA
Economic Development, Faculty of Economics and Business, University of Lampung,
Perum Bataranila. GG Sakura, Hajimena Village, Natar, South Lampung Regency,
INDONESIA
WIDIA ANGGI PALUPI
Economic Development, Faculty of Economics and Business, University of Lampung,
Wisma Cantik Manis, Rajabasa, Bandar Lampung,
INDONESIA
Abstract: - This study examines the long-term influence of inflation variables, Gross Domestic Product (GDP),
exports, imports, and remittance receipts in 7 countries of the Organization of Islamic Cooperation (OIC). This
research is expected to contribute to OIC countries related to increasing foreign exchange reserves through
inflation control, increasing export diversification, decreasing imports, and increasing remittances while still
paying attention to people working abroad. Thus, it can improve the economic level of the OIC country and
support international peace and security and protect the holy places of Muslims.
Key-Words: - Exports, FMOLS, Foreign Exchange Reserves, GDP, Import, Inflation, Remittances
Received: April 25, 2023. Revised: July 23, 2023. Accepted: July 27, 2023. Published: August 4, 2023.
1 Introduction
Islam is one of the religions with the second most
prominent adherents globally. According to [1], the
religion with the most followers is Christianity, with
2.38 billion people; the second is Islam, with more
than 1.91 billion people. The size of the Islamic
population, and in the current, every country
certainly needs other countries so that the needs of
its population are met, so they carry out
international cooperation. The Organization of
Islamic Corporations (OIC) is one form of
international cooperation.
According to the official website, the OIC is the
second largest organization after the United Nations
(UN), with 57 members. The formation of the OIC
was motivated by the concerns of Islamic countries
or the majority of the Muslim population with the
problems faced by Muslims, especially the Zionists
who burned part of the holy Al-Aqsa mosque in
1969, [2]. So that the purpose of the OIC is to
increase Islamic solidarity among member
countries, coordinate cooperation between member
countries, support international peace and security,
protect Islamic holy places, and help the struggle for
independence of the Palestinian state. In addition to
aiming in terms of politics, OIC is currently a forum
for establishing cooperation in the economic, social,
cultural, and scientific fields.
Research, [3], found that most OIC member
countries are still in the developing stages of
economics. Oeconomicsr countries formed the
Developing Eight (D-8) to gather the strengths of
Islamic countries to improve the welfare of the
people of their member countries through economic
and social development. The D-8 members are
Bangladesh, Iran, Indonesia, Egypt, Malaysia,
Nigeria, Pakistan, and Turkey.
One of the efforts that can be made to increase
economic development is to pay attention to the
balance of payments related to foreign exchange
reserves owned by a country. Foreign exchange
reserves are a significant monetary indicator in
showing the strength or weakness of a country's
economy, [4]. Foreign exchange reserves are
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1755
Volume 20, 2023
valuable and liquid assets owned by a nation, and
their value is accepted and recognized by the
international community. It can be used as legal
tender for governments or countries in international
transactions, [5]. The following is data on foreign
exchange reserves in 7 OIC countries.
Fig. 1: Foreign Exchange Reserves of 7 OIC
Countries 1990-2021 (In Million USD)
Source: World Bank (2022)
Based on Figure 1, it can be seen that the
foreign exchange reserves in the 7 OIC countries
fluctuated throughout the year. The country with the
highest relative foreign exchange reserves compared
to 6 other countries is Malaysia, with an average
foreign exchange reserve of 69556.41 million USD.
Next is Indonesia, with a moderate foreign exchange
reserve of 62084.16 million USD. The third highest
foreign exchange reserve is Turkey at 59260.99
USD, followed by Nigeria at 22887.31 million
USD, Egypt at 21972.22 million USD, Bangladesh
at 11817.17 million USD, and Pakistan at 9993.509
million USD. The receipt of foreign exchange
reserves in each country differs in several factors
influencing this actor. Research from [6], states that
foreign exchange reserves are affected by exports,
imports, exchange rates, and the consumer price
index (CPI).
In addition, [7], factors affects foreign exchange
reserves: exports, inflation, and foreign debt.
Inflation is a condition of continuously increasing
the general price of goods during a specific period,
[8]. Research conducted by, [9], found that inflation
negatively and significantly affects foreign
exchange reserves. Meanwhile, [10], research found
that inflation did not affect substantially impact
accounts. The difference between these studies is
that they used the unseeable see its effect impact
foreign exchange impact nerves in 7 OIC countries
from 1990-2021. The entire follow from graph of
the average inflation and foreign exchange reserves
in 7 OIC countries from 1990 to 2021.
Fig. 2: Average Inflation and Foreign Exchange
Reserves in 7 OIC Countries 1990-2021
Source: World Bank, Processed (2022)
Graphically, based on Figure 2, it is known that
inflation and foreign exchange reserves are
negatively related. It is known that Turkey has the
highest average inflation rate. This condition is
contrary to Turkey's average foreign exchange
reserves, which occupy the third position compared
to other countries. With the lowest average inflation,
Malaysia has the highest average foreign exchange
reserves compared to 6 differentr countries. The
phenomenon in OIC countries is inversely
proportional to research conducted by [11], which
found that inflation significantly positively affected
foreign exchange reserves. The inflation rate has a
positive effect on foreign exchange reserves. If the
prices of goods and the service sector tend to
increase or are called inflation, it will cause a
hampering of economic activity in the country
concerned. So, the country needs more foreign
exchange to transact outside the country.
According to [12] and [13], one macroeconomic
variable affecting foreign exchange reserves is
Gross Domestic Product (GDP). Study, [14], found
that GDP negatively and significantly affects
foreign exchange reserves. This result is in contrast
to [15], research which found that GDP had a
significant positive effect on foreign exchange
reserves. Based on the differences in the results of
these studies, this study uses the GDP variable to
see its impact on foreign exchange reserves in 7
OIC countries. The following is the average GDP
and foreign exchange reserves in the 7 OIC
countries for 1990-2021.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1756
Volume 20, 2023
Fig. 3: Average GDP and Foreign Exchange
Reserves in 7 OIC Countries 1990-2021
Source: World Bank, Processed (2022)
Based on Figure 3, it is known that the highest
GDP compared to other countries is Turkey, at
51.5879.4499 million USD. This is accompanied by
the high average foreign exchange reserves owned
by Turkey. This condition is in line with research
conducted by [16], which reveals that the positive
relationship between GDP and foreign exchange
reserves stays with the Monetary Approach Balance
of Payment (MABP) theory, where GDP will affect
the balance of the domestic market through changes
in domestic money demand. At the same time,
Bangladesh’s lowest average GDP and Pakistan's
foreign exchange reserves are the fifth lowest before
Pakistan, with the most insufficient foreign
exchange reserves. Shows the other factors that
affect foreign exchange reserves.
International trade l export-import activities also
affect foreign exchange reserves. Based on research
conducted by [6], using export and import variables
to see their effect on foreign exchange reserves. The
study restudies, [6], found that exports had a
significant positive effect on foreign exchange
reserves while imports had a significant adverse
impact on foreign exchange reserves. This result is
in contrast to research conducted by [17], which
found that exports hurt foreign exchange reserves,
and research conducted by [18], which found that
imports did not affect foreign exchange reserves.
The difference in the results of previous studies so
that this study includes export and import variables
to see their impact on foreign exchange reserves.
The following are the average foreign exchange
reserves, exports, and imports in the 7 OIC countries
for 1990-2021.
Fig. 1: Average Foreign Exchange Reserves,
Exports, and Imports in 7 OIC Countries 1990-2021
Source: World Bank, Processed (2022)
Based on Figure 4, it is known that the highest
export value is Malaysia, and the lowest value is
Bangladesh. The high export value in Malaysia is in
line with the high foreign exchange reserves in
Malaysia. At the same time, Bangladesh, with the
lowest exports, has relatively lower foreign
exchange reserves than other countries. Malaysia
has the highest average import, and Nigeria has the
lowest import value Nigeria. An interesting
phenomenon occurs in Malaysia, where Malaysia
has the highest export value, import value, and
foreign exchange reserves compared to 6 other OIC
countries.
The following variable that affects foreign
exchange reserves is the receipt of remittances.
Remittance is transferring funds carried out by
individuals or companies using the services of a
bank or non-bank financial institution, generally
carried out without the basis of fulfilling a financial
obligation imposed. Remittances are transfers by
migrant workers to families in the country of origin,
usually in t, usually goods. Remintasni has become
an alternative source of foreign exchange used for
external financing in addition to government loans
and private investment in many developing
countries, [19], [20]. The followings are the average
remittances and foreign exchange reserves in 7 OIC
countries for 1990-2021.
Fig. 5: Average Remittance and Foreign Exchange
Reserves in 7 OIC Countries 1990-2021
Source: World Bank, Processed (2022)
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1757
Volume 20, 2023
Figure 5 shows that the highest receipt of
remittances is Nigeria, but unfortunately, the
remittances received have yet to be able to increase
foreign exchange reserves. This can be seen from
Nigeria's foreign exchange reserves which are below
the average. This existing phenomenon is inversely
proportional to the research conducted by [21],
which found that remittances had the most
significant impact on foreign exchange reserves.
Based on the background that has been
described where there is a research gap between
previous research and phenomena in the countries of
the Organization of Islamic Cooperation, the
formulation of the problem of this research is
whether there is a long-term relationship and the
influence of inflation, GDP, exports, imports, and
remittances on foreign exchange reserves in OIC
countries in 1990-2021? This study aims to
determine the long relationship and the effect of
inflation, GDP, exports, imports, and remittances on
foreign exchange reserves in OIC countries in 1990-
2021. Based on the purpose of this study, the Fully
Modified Least Squares (FMOLS) method was
used. So the novelty of this study is a combination
of variables used to see the influence of foreign
exchange reserves, research objects, and the year of
analysis compared to previous studies. This research
is likely helpful for policymakers in making
decisions related to increasing foreign exchange
reserves.
2 Literature Review
According to [22], foreign exchange reserves are
several currencies stored and used to pay for
transactions, especially in international trade.
Foreign exchange reserves are a significant
monetary indicator in showing the strength or
weakness of a country's economy, [23]. As a means
of international transactions, the position of a
country's foreign exchange reserves is vital in
international trade transactions with other countries.
So it is essential to know the factors that affect a
country's foreign exchange reserves.
Based on the Monetary Approach Balance of
Payment (MABP) theory, when a devaluation policy
causes a price increase, it will tend to increase
inflation, increasing the demand for money.
Inflation occurs due to the rise in the money supply,
usually due to the easing of interest rates, which
impacts rising domestic prices. The increase in
domestic prices tends to reduce the foreign people's
interest in household buying domains, which comes
painted by high domestic demand for foreign goods.
This impacts the balance of payments deficit and
reduces a country's foreign exchange reserves.
Research conducted by [24], found that inflation
negatively and significantly affects foreign
exchange reserves.
MABP theory, [25], suggests that Gross
Domestic Product (GDP) affects the balance of the
domestic money market through changes in
domestic money demand. When the increase in the
need for money in the community is accompanied
by the rise in interest rates so that the money supply
does not increase and minimize inflation when the
interest rate is raised, domestic credit will decrease,
and this is accompanied by the interest of foreign
investors to hunt for the domestic currency. This
condition will increase the inflow of foreign
currency into the country and impact the balance of
payments surplus marked by an increase in foreign
exchange reserves. Thus, according to MABP
theory, the relationship between GDP and foreign
exchange reserves is positive. The results of
research conducted, [15] align MABP theory that
GDP positively affects foreign exchange reserves.
[26], in MABP theory, reveals that an increase
in exports will increase the stock of nominal money
in the country. If then the price level in the country
rises, for example, because people experience an
increase in income, [27]. In such a situation, a
balance of payments surplus occurs. Then, there is
an increase in foreign exchange reserves caused by
changes in the country's exports with the assumption
of ceteris paribus. Based on research conducted by
[27], [28], found that exports positively affect
foreign exchange reserves. Export activities are in
contrast to import activities. The MABP theory
reveals that when imports increase, the stock of
nominal domestic money will decrease, [26]. With
such conditions, it causes a balance of payments
deficit and results, resulting in foreign exchange
reserves. So, according to the MABP theory,
imports hurt foreign exchange reserves. This result
is in line with research conducted by.
In addition to inflation, GDP, exports, and
imports, some variables affect foreign exchange
reserves. Based on research conducted, it is stated
that foreign exchange reserves are needed to pay
import bills, and remittances can provide an
alternative to reduce the problem of shortages of
foreign exchange reserves in developing countries.
Thus, the remittances are recorded in the balance of
payments. So any remittance increase will affect the
current account surplus and increase foreign
exchange reserves. [21], research that remittances
positively affect budgets.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1758
Volume 20, 2023
Based on the explanation above, the hypotheses in
this study are:
H1
:
Inflation hurts foreign exchange reserves.
H2
:
GDP has a positive impact on foreign
exchange reserves
H3
:
Exports have a positive effect on foreign
exchange reserves.
H4
:
Imports hurt foreign exchange reserves.
H5
:
Remittances have a positive impact on
foreign exchange reserves.
3 Problem Solution
3.1 Types and Sources of Research Data
This research is descriptive and quantitative. This
research data is secondary data obtained from the
official website of the World Bank. This study uses
five independent variables, namely inflation, GDP,
exports, imports, and remittances, and the dependent
variable in this study is foreign exchange reserves.
This study uses panel data with seven cross-sections
and time series from 1990-2021.
3.2 Population and Sample
This study uses OIC state objects that are joined in
D-8. These countries are Bangladesh, Egypt, Iran,
Indonesia, Malaysia, Nigeria, Pakistan, and Turkey.
However, the lack of availability of Iranian data was
not included in this study, so the objects of this
research are (1) Bangladesh, (2) Egypt, (3)
Indonesia, (4) Malaysia, (5) Nigeria, (6) Pakistan,
and (7) Turkey.
3.3 Measurement of Research Variables
The following explains the variables that are the
center of the analysis to provide research direction
in Table 1.
Table 1. Variable Operational Definition
Source
Measuring Scale
World Bank
Total reserves consist of monetary gold holdings,
special ownership rights, reserves of IMF members
held by the IMF, and assets under financial control.
World Bank
The ratio of GDP in current local currency to GDP in
constant currency.
World Bank
The total value of final goods and services produced
by a country.
World Bank
The total value of other market goods and services
rendered worldwide.
World Bank
The total value of other market goods and services
received worldwide.
World Bank
Personal remittances consist of private transfers and
employee compensation.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1759
Volume 20, 2023
3.4 Research Techniques
The method used in this study was FMOLS. This
method was chosen because it is the purpose of this
study, namely to determine the long-term effect of
inflation, GDP, exports, imports, and remittances on
foreign exchange reserves in countries of Islamic
cooperation organizations. FMOLS method to
analyze the long-term impact between independent
variables on the dependent variable, [29]. FMOLS
method is used for panel data that is not stationary
and heterogeneous between panel members; this can
lead to false regressions with no economic
significance, [30]. For FMOLS estimation, two
conditions are needed: the dependent variable and
the independent variable, which is not stationary at
the level and must have a cointegration relationship
between variables. After that, the FMOLS test can
be performed. FMOLS provides a consistent
examination of the general value for the
cointegration vector under the null hypothesis to the
value of the cointegration vector that is not
necessarily common under the alternative view,
while the estimators collected in the dimensions are
not, [30]. The model, in general, can be stated as
follows.
LNCDit
=
-β1INFit + β2LNGDPit + β3EKSit -
β4IMPit + β5LNRMTit + εit (1)
Where:
LNCD
:
Natural logarithm of foreign
exchange reserves (Billion USD)
INF
:
Inflation (Percent)
LNGDP
:
Natural logarithm of Gross Domestic
Product (Billion USD)
EKS
:
Export (Percent)
IMP
:
Imports (Percent)
LNRMT
:
Logarithm natural Remittance
(Billion USD)
β1,2,3,4,5
:
Regression coefficient
i
:
Cross section (7 OIC countries)
t
:
Time series (1990-2021)
ε
:
Residual
The first condition is data stationarity. The
panel unit root test aims to ensure that the data used
in this study is stationary and to avoid spurious
regression between the dependent and independent
variables, [31]. The test statistics used in testing the
unit root panel consist of two types: the standard
unit root, which consists of Levin, Lin, and Chu
(LLC), and Breitung's test statistics. In contrast, the
individual unit root consists of lm, Pesaran, and
Shin (IPS) test statistics, ADF-Fisher test, and
Phillips Perron (PP)-Fisher test, [32], for the
hypothesis is.
H0:αi = 0
(there is a unit root, it is not stationary)
Ha: αi ≠ 0
(no unit root, stationary)
The decision is that if the probability value is
smaller than the significance level, it accepts Ha.
The second condition is the cointegration test. The
concept of cointegration determines the possibility
of a long-term equilibrium relationship between the
variables to be observed, [33]. Johansen's trial is one
of the tests that can evaluate the cointegration of
several variables, [31]. This test is carried out after
the static test because the variables to be observed
need to be tested for cointegration to see whether
there is a long-term relationship between variables
or integrated.
The hypothesis developed for the cointegration
test is as follows:
H0 : There are no cointegration variables
Ha : Variables have cointegration
The decision is to accept Ha when the
probability value is less than the significance level.
After all the tests meet the requirements, the
FMOLS estimation is carried out.
4 Results and Analysis
4.1 Research Result
4.1.1 Descriptive Statistical Analysis
The results of this research object, one of which
explains related to descriptive statistics. Descriptive
statistics include the average, maximum, minimum,
and standard deviation. Based on Table 2, the
average value of foreign exchange reserves (CD) in
the 7 OIC countries in 1990-2021 is 36,800,000,000
billion USD. Countries that have above-average
foreign exchange reserves are Malaysia, Indonesia,
and Turkey. Meanwhile, countries with below-
average foreign exchange reserves are Nigeria,
Egypt, Bangladesh, and Pakistan. The maximum
value of foreign exchange reserves during the period
1990-2021 occurs in 2021 in Indonesia, which is
145,000,000,000 billion USD. At the same time, the
lowest foreign exchange reserves occurred in 1990
in Bangladesh, which amounted to 660,000,000
billion USD. The value of the standard deviation of
the foreign exchange reserve variable is
38,200,000,000.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1760
Volume 20, 2023
The average inflation (INF) value in the 7 OIC
countries for 1990-2021 is 13.39004 percent.
Countries that have inflation values above the
average are Turkey and Nigeria. Meanwhile,
countries with below-average inflation are
Indonesia, Egypt, Pakistan, Bangladesh, and
Malaysia. The highest inflation during 1990-2021
occurred in 1998 in Turkey, which amounted to
143.6397 percent. Meanwhile, Malaysia's lowest
inflation occurred in 2009 at -5.992202 percent. The
standard deviation value of the inflation variable is
18.62723.
The average GDP value in the 7 OIC countries
for 1990-2021 is 271,000,000,000 billion USD.
Countries with above-average GDPs are Turkey and
Indonesia, while countries with below-average
GDPs are Nigeria, Malaysia, Egypt, Pakistan, and
Bangladesh. The country with the highest GDP
value during the 1990-2021 range occurred in 2021
in Indonesia, which was 1,190,000,000 billion USD,
while the country with the lowest GDP value
occurred in 1993 in Nigeria. The standard deviation
value of the GDO variable is 262,000,000,000.
The average value of exports (EKS) in the 7
OIC countries in 1990-2021 is 29,91803 percent—
the country with an export value above the average
in Malaysia. Meanwhile, countries with below-
average export values are Indonesia, Turkey,
Nigeria, Egypt, Pakistan, and Bangladesh. The
country with the highest export value during the
1990-2021 period was Malaysia in 1999, which
amounted to 121.3114 percent, while the country
with the lowest export was Bangladesh in 1990 at
5,90831600. The standard deviation of the export
variable is 26.30355.
The average import value (IMP) in the 7 OIC
countries from 1990-2021 is 29.82563 percent—the
country with an import average above the average in
Malaysia. Meanwhile, six other countries, Egypt,
Turkey, Indonesia, Bangladesh, Pakistan, and
Nigeria, have an average import value below the
average. The country with the highest import was
Malaysia in 2000, reaching 29,82563 percent, while
the country with the lowest essence was Nigeria in
1994 with only 5,90831600 percent. The standard
deviation of the imported variable is 21.35842.
The average value of remittances (RMT) is
6,300,000,000 billion USD. Countries with above-
average remittances are Nigeria, Egypt, Pakistan,
and Bangladesh. At the same time, the remittance
countries below the average are Indonesia, Turkey,
and Malaysia. The country with the highest
remittance recipient was Egypt in 2020 at
29,600,000,000 billion USD, while the country with
the lowest remittance recipient was Nigeria at
10,008,540 billion USD in 1990. The standard
deviation of the remittance variable was
7,190,000,000.
Table 2. Descriptive Statistical Analysis
Variable
Mean
Maximum
Minimum
Std. Dev.
Observations
CD
36,800,000,000
145,000,000,000
660,000,000
38,200,000,000
224
INF
13.39004
143.6397000000
-5.99220200
18.62723
224
GDP
271,000,000,000
1,190,000,000,000
27,800,000,000
262,000,000,000
224
EKS
29.91803
121.3114000000
5.90831600
26.30355
224
IMP
29.82563
100.5971000000
9.50999000
21.35842
224
RMT
6,300,000,000
29,600,000,000
10,008,540
7,190,000,000
224
Source: EViews (2022)
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1761
Volume 20, 2023
Table 3. Unit-Root Panel Test
Intercept
Intercept and Trend
Level
1st different
Level
1st different
LNCD
LLC
0.0137*
0.0000*
0.5731
0.0000*
Breitung
-
-
0.1928
0.0000*
IPS
0.4727
0.0000*
0.5893
0.0000*
ADF-Fisher
0.5191
0.0000*
0.5941
0.0000*
PP-Fisher
0.4066
0.0000*
0.8023
0.0000*
INF
LLC
0.0046*
0.0000*
0.0162
0.0000*
Breitung
-
-
0.0000
0.0000*
IPS
0.0000*
0.0000*
0.0000
0.0000*
ADF-Fisher
0.0000*
0.0000*
0.0000
0.0000*
PP-Fisher
0.0000*
0.0000*
0.0000
0.0000*
LNGDP
LLC
0.5944
0.0000*
0.8574
0.0000*
Breitung
-
-
0.2805
0.0000*
IPS
0.9949
0.0000*
0.8081
0.0000*
ADF-Fisher
0.9969
0.0000*
0.8338
0.0000*
PP-Fisher
0.9987
0.0000*
0.9635
0.0000*
EX
LLC
0.2377
0.0000*
0.3933
0.0000*
Breitung
-
-
0.4808
0.0000*
IPS
0.3546
0.0000*
0.3981
0.0000*
ADF-Fisher
0.5274
0.0000*
0.4282
0.0000*
PP-Fisher
0.3025
0.0000*
0.0917
0.0000*
IMP
LLC
0.2454
0.0000*
0.1707
0.0000*
Breitung
-
-
0.0391
0.0000*
IPS
0.0580
0.0000*
0.0492
0.0000*
ADF-Fisher
0.0631
0.0000*
0.0546
0.0000*
PP-Fisher
0.0205 *
0.0000*
0.0018
0.0000*
LNRMT
LLC
0.0006 *
1.0000
1.0000
1.0000
Breitung
-
-
1.0000
1.0000
IPS
0.1154
0.0024 *
0.9998
0.0504
ADF-Fisher
0.1736
0.0076 *
0.9863
0.0843
PP-Fisher
0.3440
0.0000 *
0.9764
0.0000 *
Source: EViews (2022)
Note: * Significant to 5%
4.1.2 Stationarity Test
To avoid spurious regression between independent
and dependent variables, the data must be stationary
through the unit-root panel test, [31]. In this study,
the unit-root panel test used was an individual unit
root test using the Augmented Dickey-Fuller (ADF)
method. The following is a test table for the unit-
root panel test using the ADF method.
Based on Table 3, it is known that all variables
are stationary at the first different level. This can be
seen from the probability value of less than α= 0.05.
Thus, the next test can be carried out, namely the
cointegration test.
4.1.3 Cointegration Test
The cointegration test is used to determine the
existence of a long-term equilibrium relationship
between the variables used, [33]. The cointegration
test used in this study is the Kao Residual
Cointegration Test. The Kao cointegration test has a
cross-sector-specific intercept and a homogeneous
coefficient on the first-level regressor, [30]. The
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1762
Volume 20, 2023
following are the results of the cointegration test
using the Kao method.
Table 4. Kao Method Cointegration Test
ADF
t-Statistic
Prob.
-3.722119
0.0001
Source: EViews 10
Based on Table 4, it is known that the
probability value of 0.0001 is smaller than the value
of which is 0.05. Thus, based on this value, it can be
concluded that all variables have a long-term
relationship. Both Fully Modified-OLS (FMOLS)
panel data analysis requirements have been met. So
the next step is the regression of the FMOLS model.
4.1.4 Fully Modified-OLS (FMOLS) Test
FMOLS panel analysis can be used to determine the
long-term impact of the influence of inflation, GDP,
exports, imports, and remittances variables on
foreign exchange reserves. The following is the
output of the FMOLS regression results.
Table 5. FMOLS Method Regression Results
Variable
Coefficient
Std. Error
t-Statistic
Prob.
INF
-0.006037
0.003327
-1.814577
0.0711
LNPDB
1.014681
0.115175
8.809923
0.0000
EX
0.023666
0.009428
2.510260
0.0128
IMP
-0.010145
0.012070
-0.840495
0.4016
LNRMT
0.085241
0.068177
1.250294
0.2126
R-squared
0.909987
Mean dependent var
23,73617
Adjusted R-squared
0.905158
SD dependent var
1.264148
SE of regression
0.389313
Sum squared resid
31.07082
Long-run variance
0.365497
Source: EViews 10
Based on Table 5, the following equation results
are obtained:
LNCDit
=
-0.006037INFit* +1.014681LNGDPit*
+ 0.023666EKSit* - 0.010145IMPit+
0.085241LNRMTit (2)
Note: * is significant at α= 0.05
The inflation regression coefficient is -
0.006037, meaning that if inflation increases by 1
percent, then foreign exchange reserves in the 7 OIC
countries, in the long run, will decrease by 0.6037
percent, cateris paribus. The GDP regression
coefficient is 1.014681, meaning that if GDP
increases by 1 percent, then foreign exchange
reserves in 7 OIC countries, in the long run, will
increase by 1.014681 percent, cateris paribus.
The export regression coefficient is 0.023666,
meaning that if exports increase by 1 percent, then
foreign exchange reserves in 7 OIC countries, in the
long run, will increase by 2.3666 percent, cateris
paribus. The import variable hurt foreign exchange
reserves, and the remittance variable positively
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1763
Volume 20, 2023
impacted foreign exchange reserves in 7 OIC
countries from 1990-2021.
The following is a t-test to see the effect of each
free variable on the bound variables.
Table 6. t-test results
Variable
t-statistics
t-table
Information
INF
-1.814577
1.652107
Significant
LNPDB
8.809923
1.652107
Significant
EX
2.510260
1.652107
Significant
IMP
-0.840495
1.652107
Not significant
LNRMT
1.250294
1.652107
Not significant
Source: EViews (2022)
Table 6 shows the influence of individual free
variables: inflation, GDP, exports, imports, and
remittances on reserves in 7 OIC countries from
1990-2021.
Inflation variable (INF) with a t-statistic value
of -1.814577, more significant than the t-table value
of 1.652107. Based on the comparison of t-
statistical and t-table values, it is concluded that the
inflation variable has a negative and significant
effect on foreign exchange reserves in 7 OIC
countries from 1990-2021.
GDP variable (LNPDB) with a t-statistic value
of 8.809923, more significant than the t-table value
of 1.652107. Based on the comparison of t-
statistical and t-table values, it is concluded that the
GDP variable has a positive and significant effect on
foreign exchange reserves in 7 OIC countries from
1990-2021.
Export variable (EKS) with a t-statistic value of
2.510260, more significant than the t-table value of
1.652107. Based on the comparison of t-statistics
and t-table values, it is concluded that the export
variable has a positive and significant effect on
foreign exchange reserves in 7 OIC countries from
1990-2021.
Import Variable (IMP) with a t-statistic value of
-0.840495, smaller than the t-table value of
1.652107. Based on the comparison of t-statistical
and t-table values, it is concluded that the imported
variable has a negative and insignificant effect on
foreign exchange reserves in 7 OIC countries from
1990-2021.
The remittance variable (RMT) has a t-statistic
value of 1.250294, smaller than the t-table value of
1.652107. Based on the comparison of t -statistical
and t-table values, it is concluded that the remittance
variable has a positive and insignificant effect on
foreign exchange reserves in 7 OIC countries in
1990-2021.
The value of the coefficient of determination
(R2) is a measure of the model's ability to explain the
dependent variable. Based on the FMOLS model’s
regression estimation results, the coefficient of
determination (R2) is 0.909987 or 90.9987 percent.
This means that the independent variables of
inflation, GDP, exports, imports, and remittances
affect the foreign exchange reserves in the 7 OIC
countries in 1990-2021 by 90.9987 percent, and the
remaining 9.00013 percent is explained by other
variables not included in the model.
4.2 Discussion
4.2.1 Effect of Inflation on Foreign Exchange
Reserves
The results of this study indicate that inflation has a
negative and significant effect on foreign exchange
reserves in 7 OIC countries from 1990-2021.
Foreign exchange reserves in the 7 OIC countries
will decrease when inflation increases, and vice
versa. When inflation decreases, foreign exchange
reserves will increase. This study’s results align
with research conducted by [27], which found that
inflation has a negative and significant effect on
foreign exchange reserves. This research is also in
line with research conducted by [24].
Inflation is a condition in which the general
price increase of funds occurs continuously. This
study’s inflation indicator is the GDP deflator
(percent). In the economic literature, the inflation
rate equals the nominal money growth rate minus
the economic growth rate, [34]. The inflation rate of
each country is undoubtedly different. Inflation
occurs due to an increase in the money supply,
usually due to the easing of interest rates, which
impacts increasing domestic prices. The increase in
domestic prices tends to reduce foreign people's
interest in buying domestic goods, accompanied by
high demand for foreign goods. This impacts the
balance of payments deficit and reduces a country's
foreign exchange reserves. So, the long-term effect
of inflation in 7 OIC countries is negative.
4.2.2 Effect of Gross Domestic Product (GDP) on
Foreign Exchange Reserves
The results of this study show that GDP had a
positive and significant impact on foreign exchange
reserves in 7 OIC countries from 1990-2021. This
means that when GDP increases, it is accompanied
by an increase in foreign exchange reserves
position. When GDP decreases, the foreign
exchange reserves of the 7 OIC countries also
decrease. These results align with, [35], research
finding that GDP has a positive and significant
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1764
Volume 20, 2023
effect on foreign exchange reserves. This research
also aligns with, [15].
This finding is also in line with the MABP
theory, which is a condition where gross domestic
product affects the balance of the domestic market
with changes in the demand for domestic money.
GDP is one indicator of a country's overall
economic output; an increase in the population's
welfare marks this. The higher the standard of living
of the population, in addition to using their income
for the consumption of goods and services, the
people of a country choose to save their income in
the form of time deposits or other forms of savings.
Conditions like this impact the increasing demand
for money and the growing GDP. The need for
money in the community will be accompanied by an
increase in interest rates so that the money supply
does not increase and minimize inflation. This
condition will increase the inflow of foreign
currency into the country and impact the balance of
payments surplus marked by an increase in foreign
exchange reserves. Thus, there is a positive and
significant relationship between GDP and foreign
exchange reserves in the 7 OIC countries.
4.2.3 Effect of Exports on Foreign Exchange
Reserves
The results of this study show that the export
variable has a positive and significant effect on
foreign exchange reserves in 7 OIC countries from
1990-2021. Foreign exchange reserves will increase
if exports increase, and vice versa. If exports
decrease, foreign exchange reserves will also
decrease. The results of this study are in line with
research conducted by [36], [37], [38], which shows
that exports have a positive and significant influence
on foreign exchange reserves. The results of this
study are supported by [4].
Export is an international trade activity where
domestic products are traded abroad. The
relationship between exports and foreign exchange
reserves is that exports generate a portion of foreign
exchange, [10]. The purpose of export activities is,
of course, to make a profit. Profits are obtained from
foreign exchange and are included in the balance of
payments. Export activities bring in foreign
exchange, which the state can use to finance imports
and domestic economic sectors. According to [39],
the current account balance is influenced by several
factors, shown in the following equation.
Current account balance
=
(Exports–Imports)
+(Net income abroad
+Net current
transfers) (3)
Equation (3) above shows the condition of
foreign exchange reserves that can measure exports,
imports, and capital flows. The increase in exports
occurs when the terms of payment can help
consumers from abroad and the increase in goods
that come out. Export activities can stimulate local
demand and help develop large industrial units to
compete with countries with more advanced
industries. Thus there is a positive influence
between exports and foreign exchange reserves.
4.2.4 Effect of Imports on Foreign Exchange
Reserves
The results of the FMOLS regression method show
that the imported variable had a negative and
insignificant impact on foreign exchange reserves in
7 OIC countries from 1990-2021. This means that
an increase in imports causes a negligible decrease
in foreign exchange reserves and vice versa. When
imports decrease causes an insignificant rise in
foreign exchange reserves, this study’s results align
with, [40]. A country carries out import activities
when the government cannot produce itself.
Domestic production cannot meet domestic needs,
or foreign products are cheaper than domestic
prices. Countries that import require high foreign
exchange to pay for their transactions. This
condition certainly causes a reduction in foreign
exchange reserves owned by a government. The
insignificant news of the imported variable to
foreign exchange reserves is because OIC countries
tend to import luxury goods, such as luxury cars.
Thus, it can generate tax rates on imported luxury
goods. The existence of luxury goods import tax
fees paid by importers can add foreign exchange
reserves, [41].
4.2.5 Effect of Remittances on Foreign Exchange
Reserves
Based on the research results, the remittance
variable has a positive and insignificant impact on
foreign exchange reserves in 7 OIC countries from
1990-2021. An increase in remittances causes a
negligible rise in foreign exchange reserves and vice
versa. When remittances decrease causes an
insignificant decrease in foreign exchange reserves.
Remittances from abroad to within the country
positively impact foreign exchange reserves.
Personal remittances from emigrants to families and
fluctuating commodity prices arising from changes
in world demand caused the flow of foreign
currency to increase foreign exchange reserves. This
condition is closely related to the exchange rate. A
country's foreign exchange reserves will also
increase when the rupiah appreciates. Research
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1765
Volume 20, 2023
states that foreign exchange reserves are needed to
pay import bills, and remittances can provide an
alternative to reduce the problem of shortages of
foreign exchange reserves in developing countries.
The insignificance of the remittance variable to
foreign exchange reserves is due to the value of
imports owned by 7 OIC countries during the 1990-
2021 range, which is still dominated by the high
value of imports. As depicted in the following
graph.
Fig. 6: Remittances (% GDP) and Imports (% GDP)
in 7 OIC Countries Based on Averages per the Year
1990-2021
Source: World Bank, processed (2022)
Figure 6 shows that the average value of
imports (% GDP) is higher than that of remittance
receipts (% GDP) in 7 OIC countries from 1990-
2021. Remittances provide additional foreign
exchange reserves but are used again to pay for
imported goods relatively higher than remittances.
So remittances have a positive but insignificant
effect on foreign exchange reserves in the long term.
5 Conclusion
The result of this study is that inflation has a
negative and significant effect on foreign exchange
reserves in the long term. The variables of GDP and
exports have a positive and significant impact on
foreign exchange reserves, as imports have an
adverse and insignificant effect in the long term.
And the receipt of remittances has positive and
negligible long-term results on foreign exchange
reserves in the seven countries of the Organization
of Islamic Cooperation. The higher average value of
imports than remittance receipts led to insignificant
remittances to foreign exchange reserves in 7 OIC
countries.
However, governments in all OIC countries
should pay more attention to and protect workers
abroad. Exports also positively affect foreign
exchange reserves; this indicates that each OIC
country seeks to increase product diversification.
The government can work with the private sector to
boost export diversification. They are growing
exports by paying attention to superior products
improving quality and reducing production costs to
attract foreign people to buy these products. The
government should also strive to meet the needs of
the domestic community optimally; this is done to
reduce imports. In addition, the government can
stabilize the macroeconomics through inflation
control; this is done to maintain people's purchasing
power to increase people's income.
This research can be developed for literature,
especially by adding research objects. In this study
using 7 OIC countries, there are 57 OIC member
countries. This research for subsequent research can
increase the number of research objects of OIC
countries. In addition, it is also related to the method
used. Further research can use techniques to see the
short-term and long-term influence of inflation,
GDP, exports, imports, and remittances on foreign
exchange reserves to produce a more in-depth study.
References:
[1] World Population Review, “Total Population
by Country 2022,” World Population
Review, 2022.
https://worldpopulationreview.com/countries
(accessed Oct. 18, 2022).
[2] Indonesian Ministry of Foreign Affairs,
“Organization of Islamic Cooperation
(OIC),” Indonesian Ministry of Foreign
Affairs, 2014.
https://kemlu.go.id/portal/id/read/129/halama
n_list_lainnya/organisasi-kerja-sama-islam-
oki (accessed Oct. 25, 2022).
[3] T. Megasari and S. Saleh, “The Determinant
of FDI Inflows in OIC Countries,” Int. J.
Islam. Econ. Financ., vol. 4, no. 1, pp. 31–
50, 2021, doi: 10.18196/ijief.v4i1.9473.
[4] S. Rahmawati and S. Suriani, “The Impact of
Macroeconomic Indicators on Indonesia’s
Foreign Exchange Reserve Position,” J.
Ekon. Pembang. Kaji. Masal. Ekon. dan
Pembang., vol. 23, no. 1, pp. 19–30, 2022,
doi: 10.23917/jep.v23i1.17673.
[5] D. Salvatore, International Economics, 11th
ed. John Wiley & Sons, 2013.
[6] I. Isramaulina and I. Ismaulina, “Foreign
Exchange Reserves And Other Factors
Affecting The Indonesian Economy (Period
2014-2018),” E-Mabis J. Ekon. Manaj. dan
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1766
Volume 20, 2023
Bisnis, vol. 22, no. 1, pp. 62–70, 2021, doi:
10.29103/e-mabis.v22i1.656.
[7] S. Suripto, R. R. Setyawan, I. Istanti, and H.
Mustofa, “An Analysis of Factors Affecting
Indonesia ’ s Foreign Exchange Reserve,”
OPTIMUM, vol. 12, no. 2, pp. 223–235,
2021.
[8] F. S. Mishkin, Economics of money, banking
and financial markets, 12th ed. Pearson,
2018.
[9] I. S. Chaudhry, M. H. Akhtar, K. Mahmood,
and M. Z. Faridi, “Foreign Exchange and
Inflation in Pakistan: Evidence from ARDL
Modelling Approach,” Int. J. Econ. Financ.,
vol. 3, no. 1, 2011, doi:
10.5539/ijef.v3n1p69.
[10] K. Andriyani, T. Marwa, N. Adnan, and M.
Muizzuddin, “The Determinants of Foreign
Exchange Reserves: Evidence from
Indonesia,” J. Asian Financ. Econ. Bus., vol.
7, no. 11, pp. 629–636, 2020, doi:
10.13106/jafeb.2020.vol7.no11.629.
[11] M. Lin and J. Wang, “Foreign exchange
reserves and inflation : an empirical study of
five East Asian economies,” Empir. Econ.
Lett., vol. 8, no. 5, pp. 487–493, 2009.
[12] S.-I. Fukuda and Y. Kon, “Macroeconomic
Impacts of Foreign Exchange Reserve
Accumulation: Theory and International
Evidence,” ADBI Work. Pap. Ser., no. 197,
pp. 4–25, 2010, [Online]. Available:
http://www.adbi.org/working-
[13] M. Azeem and M. Khurshid, “Impact of
macroeconomic variables on foreign
exchange reserves: A case from Pakistan,”
Econ. J. Emerg. Mark., vol. 11, no. 2, pp.
173–182, 2019, doi:
10.20885/ejem.vol11.iss2.art5.
[14] Rusiadi and A. Novalina, “The Ability of
Keynesian Balance of Payment Theory and
Monetary Approach Balance of Payment to
Detect Indonesia's Trade Balance Balance,”
vol. 151, pp. 10–17, 2015.
[15] Alda Heriyatma, Elok Fitriani Rafikasari,
and Moh Farih Fahmi, “The Effect of Gross
Domestic Product, Exports, Imports,
Exchange Rates, Inflation and External Debt
on Indonesia’S Foreign Exchange Reserves
in 2017-2020 (Study From an Islamic
Perspective),” Qawãnïn J. Econ. Syaria Law,
vol. 6, no. 2, pp. 177–198, 2022, doi:
10.30762/qaw.v6i2.156.
[16] E. Nor, M. Azali, and S.-H. Law,
“International Reserves, Current Account
Imbalance and Short Term External Debt: A
Comparative Study,” Int. J. Econ. Financ.,
vol. 3, no. 4, pp. 83–94, 2011, doi:
10.5539/ijef.v3n4p83.
[17] H. Juliansyah, P. Moulida, and A. Apridar,
“Analysis of Factors Affecting Indonesia's
Foreign Exchange Reserves Evidence
(Cointegration and Causality),” J. Ekon.
Reg. Unimal, vol. 3, no. 2, p. 32, 2020, doi:
10.29103/jeru.v3i2.3204.
[18] D. W. Pratama, “The Influence of Export
Import and Rupiah Exchange Rate on
Indonesia's Foreign Exchange Reserves
2000-2019,” J. Ekodunamica, vol. 4, no. 13–
29, pp. 791–792, 2020.
[19] A. G. Mijiyawa and D. K. Oloufade, “Effect
of Remittance Inflows on External Debt in
Developing Countries,” Open Econ. Rev., no.
0123456789, 2022, doi: 10.1007/s11079-
022-09675-5.
[20] D. Ratha, “Workers ’ Remittances : An
Important Development Finance,” World
Dev., vol. 2003, pp. 157–175, 2003,
[Online]. Available: http://www-
wds.worldbank.org/external/default/WDSCo
ntentServer/IW3P/IB/2003/05/30/000094946
_03051504051564/additional/310436360_20
050014094932.pdf
[21] D. E. Vacaflores and R. Kishan,
“Remittances, international reserves, and
exchange rate regimes in 9 Latin American
countries, 1997-2010,” Appl. Econom. Int.
Dev., vol. 14, no. 2, pp. 97–116, 2014.
[22] A. H. Manarung, Foreign Exchange
Reserves and Foreign Exchange (Edition 1).
Jakarta: PT. Kompas Media Nusantara, 2016.
[23] P. Sayoga and S. Tan, “Analysis of
Indonesia's Foreign Exchange Reserves and
Factors Influencing Them. Development
Economics Study Program, Faculty of
Economics and Business, Jambi University,”
J. Paradig. Ekon., vol. 12, no. No.1, pp. 25–
30, 2017.
[24] K. Rissa, K. Pramita, M. Kembar, and S.
Budhi, “The Effect of Usd Exchange Rates,
Inflation and Foreign Investment and
Indonesia Foreign Exchange Reserves,” Am.
J. Humanit. Soc. Sci. Res., vol. 4, no. 3, pp.
193–200, 2020, [Online]. Available:
www.ajhssr.com
[25] A. Kavous, “The Monetary Approach to
Balance of Payments : A Review of the
Seminal Long-Run Empirical Research,” J.
Econ. Econ. Educ. Res., pp. 37–73, 2005.
[26] G. N. Masdjojo, “Study of the Keynesian
and Monetarist Approaches to the Dynamics
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1767
Volume 20, 2023
of Foreign Exchange Reserves through
Tracing the International Balance of
Payments: An Empirical Study in Indonesia
in the 1983-2008 Period,” Univ. Diponegoro,
pp. 1–398, 2010.
[27] A. I. Anwar, B. P. Djamal, and S. U.
Nurbayani, “Effects of Foreign Loans,
Interest Rate, and Export for the Foreign
Exchange Reserves in Indonesia 2002-
2016,” Hasanuddin Econ. Bus. Rev., vol. 3,
no. 2, p. 59, 2019, doi:
10.26487/hebr.v3i2.1942.
[28] L. Girton and D. E. Roper, “A Monetary
Model of Exchange Market Pressure Applied
to the Post-War Canadian Experience,” Int.
Financ. Discuss. Pap., vol. 1977, no. 92, pp.
1–32, 1977, doi: 10.17016/ifdp.1976.92.
[29] I. Yahyaoui and N. Bouchoucha, “The long-
run relationship between ODA, growth and
governance: An application of FMOLS and
DOLS approaches,” African Dev. Rev., vol.
33, no. 1, pp. 38–54, 2021, doi:
10.1111/1467-8268.12489.
[30] P. Pedroni, Fully modified OLS for
heterogeneous cointegrated panels, vol. 15.
2000. doi: 10.1016/S0731-9053(00)15004-2.
[31] A. Widarjono, Introductory Econometrics
and Its Applications EViews Guide
Dissertation, 5th ed. Yogyakarta: UPP STIM
YKPN, 2018.
[32] D. Gujarati, Basic Econometrics, 5th Edition.
New York: McGraw-Hill, 2009.
[33] U. Sekaran and R. Bougie, Research
Methods for Business: A Skill-Building
Approach, 7th ed. West Sussex: Wiley &
Sons, 2016.
[34] B. H. Ngoc, “The asymmetric effect of
inflation on economic growth in vietnam:
Evidence by nonlinear ARDL approach,” J.
Asian Financ. Econ. Bus., vol. 7, no. 2, pp.
143–149, 2020, doi:
10.13106/JAFEB.2020.VOL7.NO2.143.
[35] M. Niaz Murshed Chowdhury, M. Jashim
Uddin, and M. Saiful Islam, “An
Econometric Analysis of the Determinants of
Foreign Exchange Reserves in Bangladesh,”
J. World Econ. Res., vol. 3, no. 6, pp. 72–82,
2014, doi: 10.11648/j.jwer.20140306.12.
[36] A. Nteegah and G. E. Okpoi, “External
Trade and its implications on Foreign
Exchange Reserves in Nigeria,” West African
J. Ind. Acad. Res., vol. 17, no. 1, pp. 108–
119, 2016.
[37] M. Zaenal Arifin and R. Juniawaty,
“Analyzing the influence of Export and
Import on the Foreign Exchange Reserves of
Indonesia from 1997 to 2018,” JPPEI, vol. 1,
no. 1, pp. 24–30, 2022, [Online]. Available:
http://journal.klikpeneliti.id/index.php/ekono
mi
[38] P. Djatmiko and N. SBM, “Impact Non-Oil
and Gas Exports and Oil and Gas Exports on
The Position of Indonesia Foreign Exchange
Reserves,” J. Pendidik. Ekon. Dan Bisnis,
vol. 7, no. 1, pp. 87–100, 2019, doi:
10.21009/jpeb.007.1.8.
[39] R. Heakal, “Current Account Balance
Definition: Formula, Components, and
Uses,” Investorpedia, 2022.
https://www.investopedia.com/insights/explo
ring-current-account-in-balance-of-
payments/ (accessed Mar. 27, 2023).
[40] O. Oluyemi and E. Didi Isaac, “The Effect of
Exchange Rate on Imports and Exports in
Nigeria,” IIARD Int. Inst. Acad. Res. Dev.,
vol. 3, no. 2, 2017, [Online]. Available:
www.iiardpub.org
[41] Agustina and Reny, "The Influence of
Exports, Imports, Rupiah Exchange Rates,
and Inflation Rates on Indonesia's Foreign
Exchange Reserves," J. Wira Ekon.
Mikroskil, vol. 4, no. 2, pp. 61–70, 2014,
doi: 10.55601/jwem.v4i2.214.
Contribution of Individual Authors to the
Creation of a Scientific Article (Ghostwriting
Policy)
-Heru Wahyudi: Conceptualization, Methodology,
and Formal analysis.
-I Wayan Suparta: Investigation, Data curation,
Supervision, and Writing- Reviewing.
-Widia Anggi Palupi: Software, Visualization,
Editing, and Writing-Original draft preparation.
Sources of Funding for Research Presented in a
Scientific Article or Scientific Article Itself
The research in this manuscript is supported by
Lembaga Penelitian dan Pengabdian kepada
Masyarakat (LPPM) Universitas Lampung.
Conflicts of Interest
The authors have no conflicts of interest to declare
that are relevant to the content of this article.
Creative Commons Attribution License 4.0
(Attribution 4.0 International, CC BY 4.0)
This article is published under the terms of the
Creative Commons Attribution License 4.0
https://creativecommons.org/licenses/by/4.0/deed.en
_US
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.155
Heru Wahyudi,
I Wayan Suparta, Widia Anggi Palupi
E-ISSN: 2224-2899
1768
Volume 20, 2023