UJAR EKONOMI MAKRO PERTEMUAN 16 KURS VALUTA ASING

Summary

In this educational video, Reza Chairul Hadi explains key concepts of foreign exchange rates (kurs valuta asing). The video covers how exchange rates are determined, the different systems such as fixed, floating, and pegged rates, and the factors that influence currency movements, including economic indicators, market sentiment, and government intervention. The video also discusses how exchange rates impact international trade, imports, exports, and foreign debt. It provides a thorough overview for viewers seeking to understand the complexities of currency valuation and its broader economic implications.

Takeaways

• 😀 Foreign exchange (Valas) refers to the value of one currency against another, like the Rupiah (IDR) to US Dollar (USD).
• 😀 The exchange rate fluctuates based on demand and supply in the market, with higher demand increasing a currency's value.
• 😀 Exchange rates can be determined either by market forces (supply and demand) or government intervention.
• 😀 A fixed exchange rate is set by the government and does not change with market fluctuations.
• 😀 A floating exchange rate is determined by market forces, and the government has minimal control over it.
• 😀 Pegged exchange rates link a country's currency value to another major currency or a group of currencies.
• 😀 Crawling peg involves adjusting a currency's exchange rate periodically to meet a target over time.
• 😀 A basket of currencies is used by some countries, where the value of the currency is based on a weighted average of several other currencies.
• 😀 Economic indicators such as inflation, interest rates, and economic growth are fundamental factors influencing exchange rates.
• 😀 Government intervention can impact exchange rates, such as by imposing controls or buying/selling foreign currency.
• 😀 Exchange rate fluctuations impact international trade: importers face higher costs with a weaker domestic currency, while exporters benefit from a stronger currency.
• 😀 A depreciating domestic currency increases the cost of foreign-denominated debts, negatively affecting businesses and governments.
• 😀 Factors influencing exchange rates include market sentiment, technical factors (supply and demand), and trade-related changes (imports/exports).

Q & A

What is the definition of foreign exchange (forex)?

Foreign exchange refers to the value of one currency relative to another. It is the process of trading one currency for another, typically used in international trade. For example, the exchange rate between the Indonesian Rupiah and the US Dollar determines how much one currency is worth in terms of the other.

How is the exchange rate between two currencies determined in the free market?

In a free market, exchange rates are determined by supply and demand. When demand for a currency is high, its value increases (appreciates), and when demand decreases, its value drops (depreciates). For example, if more people want US Dollars to buy goods from the United States, the value of the Dollar will rise against the local currency.

What role does government intervention play in exchange rate determination?

Governments may intervene in the foreign exchange market to stabilize their currency or to achieve specific economic goals. For instance, a government might set a fixed exchange rate or buy/sell foreign currencies through its central bank to prevent excessive fluctuations in its national currency.

What is a fixed exchange rate system, and how does it work?

A fixed exchange rate system is one where the value of a country's currency is tied to another major currency or a basket of currencies. The government or central bank maintains this fixed rate by buying or selling foreign currencies as necessary to keep the exchange rate stable.

What is the difference between a floating exchange rate and a fixed exchange rate?

A floating exchange rate is determined by market forces, where the currency value fluctuates based on supply and demand. In contrast, a fixed exchange rate is set by the government and remains stable unless the government intervenes to adjust it.

What is a pegged exchange rate system, and how does it differ from other systems?

A pegged exchange rate system is when a country’s currency is tied to another country's currency or a group of currencies. The value of the currency moves in line with the value of the currency it is pegged to. This system offers stability but can limit a country's ability to adjust its own monetary policy.

What is a crawling peg exchange rate system, and why is it used?

A crawling peg system involves making small, gradual adjustments to a country's currency value at regular intervals. It allows the currency to move towards a target value over time, helping to avoid sudden shocks and maintain stability in the economy.

How does market sentiment affect exchange rates?

Market sentiment, which is influenced by news, rumors, and political events, can significantly affect exchange rates in the short term. Positive news can lead to currency appreciation, while negative news or rumors can lead to depreciation.

What are the fundamental factors that influence exchange rates?

Fundamental factors that influence exchange rates include economic indicators such as inflation rates, interest rates, economic growth, and the relative economic performance of different countries. For example, higher inflation in a country can lead to the depreciation of its currency.

How do exchange rate fluctuations impact businesses involved in international trade?

Exchange rate fluctuations can affect importers, exporters, and companies with foreign debt. For importers, a weaker domestic currency means higher costs for imported goods. For exporters, a stronger currency may reduce demand for their products abroad, while a weaker currency may increase demand for their exports. Companies with foreign-denominated debts may face higher repayment costs if the domestic currency depreciates.