HAS FINTECH INFLUENCED INDONESIA’S EXCHANGE RATE AND INFLATION?
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.
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Copyright (c) 2018 Seema Wati Narayan, Sahminan Sahminan
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Buletin Ekonomi Moneter dan Perbankan / Bulletin of Monetary Economics and Banking is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.