Real exchange rate undervaluation and Indonesia’s manufacturing exports

This study analyzes the impact of real exchange rate undervaluation on Indonesia’s manufacturing exports in 22 industries throughout 1990–2015. The was undertaken by modifying a partial equilibrium model monopolistic competition for exporting firms and using augmented mean group (AMG) method. confirms that rate, both misalignment changes levels (depreciation/appreciation), are insignificant affecting exports. In addition, this finds manufactured significantly determined previous period, interest rates, wages, labor productivity, firm growth. finding indicates manipulation policy is not an important factor strengthening competitiveness We suggest policies play more roles driving creating competitive conducive business climate, lowering domestic reforming system.