THE EFFECT OF EXCHANGE RATE ON GOVERNMENT BOND YIELD IN INDONESIA
Keywords:
Capital Market, Exchange Rate, Financial Management, Government Bond Yield, IndonesiaAbstract
Exchange rate fluctuations have become one of the important macroeconomic factors influencing financial market performance, particularly in the government bond market. Changes in exchange rates may affect investor perceptions, capital flows, and investment decisions, which in turn can influence government bond yields. In Indonesia, government bonds play a significant role in financing state expenditures and maintaining financial market stability. Therefore, understanding the relationship between exchange rates and government bond yields is important for investors, policymakers, and financial market participants. This study aims to examine the effect of exchange rates on government bond yields in Indonesia. The research employs a quantitative approach using secondary data obtained from relevant financial and economic institutions. The data analysis method used in this study is simple linear regression analysis to identify the relationship between exchange rate movements and government bond yields. This research is expected to provide insights into the role of macroeconomic variables in influencing bond market performance and contribute to the development of financial management literature, particularly in the areas of investment management and capital market studies. In addition, the findings are expected to serve as a reference for investors and policymakers in understanding the dynamics of Indonesia’s financial market.
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