# Exchange Rate Behaviour in ASEAN-5: The Role of Current Account, Inflation, and Political Stability
> Bato A.R.

URL kanonis: https://discover.unhas.ac.id/publications/pub_scopus_105033573672
Jurnal / Konferensi: Revista Mexicana De Economia Y Finanzas Nueva Epoca
Tahun terbit: 2026
DOI: https://doi.org/10.21919/remef.v21i2.1319
ISSN: 16655346
Kuartil SJR: Q4
Citations: 0

## Authors
- Bato A.R.

## Abstract
This study analyses the influence of the current account, inflation, and political stability on exchange rate dynamics in ASEAN-5 countries during 2010–2024. A quantitative approach is applied using annual data from the IMF, World Bank, and BIS, estimated through panel data regression with the optimal specification determined by Chow, Hausman, and Lagrange Multiplier tests. The findings show that stronger current account balances foster domestic currency appreciation, while higher inflation contributes to depreciation, consistent with balance of payments and purchasing power parity theories. Political stability exerts a positive effect by improving market confidence and encouraging capital inflows. Policy recommendations highlight the need for coordinated monetary and fiscal policies alongside institutional reforms to strengthen currency resilience. The main limitations relate to the use of annual data and the heterogeneity across countries. The study provides original evidence on the joint role of economic and political fundamentals in sustaining exchange rate stability in emerging economies, underscoring the multidimensional nature of currency dynamics and their broader policy implications. JEL Classification: F3, F30, F31, F32 Keywords: Current Account, Inflation, Political Stability, Exchange Rate

## Keywords
- Economics
- Exchange rate
- Currency
- Balance of payments
- Macroeconomics
- Monetary economics
- Current account
- Panel data
- Politics
- Inflation (cosmology)
- Fiscal policy
- Stabilization policy
- Monetary policy
- Purchasing power parity
- Exchange-rate regime
- Capital account
- Explanatory power
- Purchasing power
- International economics
- Stability (learning theory)
- Credibility
- Interest rate parity
- Price of stability
- Balance (ability)
- Capital market
- Capital (architecture)
- Effective exchange rate
- Currency union
- Aggregate demand
- Aggregate data

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