• Seema Wati Narayan RMIT University
  • Sahminan Sahminan Bank Indonesia
Keywords: FinTech, Exchange rate, Inflation, Indonesia


The digital financial services industry or financial technology (FinTech) has emerged in Indonesia in recent years. The FinTech industry, although disruptive, promises among other things to reduce costs of, and improve access to, financial services. This paper investigates the macroeconomic implications of FinTech companies in Indonesia over the period 1998-2017. In particular, we investigate the impact of FinTech on the Indonesian exchange rate (Rupiah vis-a-vis the US dollar) and the inflation rate. Our results suggest that FinTech is able to reduce inflation and lead to a real appreciation of the Rupiah against the US dollar, although its effect on the exchange rate is delayed. We explain our results and discuss future research directions in the paper.


Download data is not yet available.


Bromberg, L., Godwin, A., and Ramsay, I. (2018). Cross-border cooperation in financial regulation: crossing the FinTech bridge. Capital Markets Law Journal, 13(1), 59-84.
Camarero, M., and Tamarit, C. (2002). Oil prices and Spanish competitiveness: a cointegrated panel analysis. Journal of Policy Modeling, 24, 591–605.
Chui, I, H-Y. (2017). Fintech and Disruptive Business Models in Financial Products, Intermediation and Markets - Policy Implications for Financial Regulators. Journal of Technology Law and Policy, 21(1), 55-112.
Chen, S. S. and Chen, H. C. (2007). Oil prices and real exchange rates. Energy Economics, 29, 390–404.
Christiano, L. J, Eichenbaum, M., and Evans, C. L. (2005). Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy. Journal of Political Economy, 113(1): 1-45.
FinTech Singapore News. (2018). The FinTech Indonesia Report. Downloaded from: http://FinTechnews.sg/20712/indonesia/FinTech-indonesia-report-2018/
Gali, J., and Monacelli, T. (2005). Monetary policy and exchange rate volatility in a small open economy. Review of Economic Studies, 72(3), 707–734.
Gali, J., and Gertler, M. (1999). Inflation dynamics: A structural econometric analysis. Journal of Monetary Economics, 44, 195-222.
Gordon, R. J. (1997). The time-varying nairu and its implications for economic policy. Journal of Economic Perspectives, 11, 11–32.
Gordon, R. J. (2011). The history of the Phillips curve: consensus and bifurcation. Economica, 78, 10–50.
Jagtiani, J., and Lemieux, C. (2018). Do FinTech lenders penetrate areas that are underserved by traditional banks? Journal of Economics and Business, Forthcoming.
Lannet, M., and Luoto, J. (2014). Does Output Gap, Labour’s Share or Unemployment rate drive inflation? Oxford Bulletin of Economics and Statistics, 76, 715-726.
Lee, I., and Shin, Y. j. (2018). FinTech: Ecosystem, business models, investment decisions and challenges, Business Horizons, 61(1), 35-46.
Meese, R., and Rogoff, K. (1988). Was it real? The exchange rate-interest rate differential relation over the modern floating-rate period. Journal of Finance, 43(4), 933-948.
Maier, E. (2016). Supply and demand on crowdlending platforms: connecting small and medium sized enterprise borrowers and consumer investors. Journal of Retailing and consumer Services, 33, 143-153.
Narayan, P., Narayan, S., Rahman, R. E., and Setiawan, I. (2018). Bitcoin Price Growth and Indonesia’s Monetary System. Emerging Markets Review, Forthcoming.
Narayan, S. (2013). Foreign exchange markets and oil price in Asia. Journal of Asian Economics, 28, 41–50.
Puschmann, T. (2017). FinTech, Business & Information Systems Engineering. The International Journal of WIRTSCHAFTSINFORMATIK, 59(1), pp. 69-76.
Roberts, J. M. (1995). New Keynesian economics and the Phillips curve. Journal of Money, Credit and Banking, 27(4), 975–984
Sbordone, A. M. (2002). Prices and unit labor costs: a new test of price stickiness. Journal of Monetary Economics, 49(2), 265–292.
Temelkov, Z. (2018). Fintech firms opportunity or threat for banks? International journal of information, Business and Management, 10(1), 137-143.
Venkatesh, V., and Bala, H. (2008). Technology Acceptance Model 3 and a Research Agenda on Interventions. Decision Sciences, 39(2), http://dx.doi.org/10.1111/j.1540-5915.2008.00192.x.
How to Cite
Narayan, S., & Sahminan, S. (2018). HAS FINTECH INFLUENCED INDONESIA’S EXCHANGE RATE AND INFLATION?. Buletin Ekonomi Moneter Dan Perbankan, 21(2), 177-190. https://doi.org/10.21098/bemp.v21i2.966