| dc.description.abstract | This research is aimed to analyse the correlation of private capital inflow with
exchange rate and inflation. Analysis methods which is used in this research is
structural vector cointegrating VAR (SCVAR) with simultaneous model.
Impulse response test result, showed that the shock of exchange rate is
negatively responsed by private capital inflow, this is explained through indirectly
exchange rate path that the depreciation of exchange rate increase the price of import
goods, that causes cost push inflation. National product that depands on import goods,
caused the increase of National output production cost. Central Bank intervention to
overcome the distortion in the economic instability, is done through BI Rate, that soon
transmitted to banking rate.
Interest rate differential becomes attractive power to foreign investor and
speculator that has great return orientative. Current account deficit is negatively
responsed by private capital inflow, it is showed by the high of Indonesian import as
the implication of two cases, the first, high investation as result of great number of
private capital inflow. The Second, national product is highly consists of import goods.
The phenomenon of price puzzle can be seen from the supply side, that is
representated through forward looking of expectation from economic doer about
inflation in the future. | en_US |
