ABSTRACT

Indonesia is developing country that the value of its currency rate is depend on the foreign
exchange rate especially with US dollar. The fluctuations of rupiah value against the US
dollar, which has tended to decline in recent years. It is caused by various factors, such as
Money Supply, Interest Rate, capital supply, inflation, import and export. The aim of this
research is to know what the factor that make rupiah value fluctuate is.

Keywords : Rupiah, Fluctuate, Declining

INTRODUCTION

Every country has a currency to conduct their transaction. The different of currency
among the countries is called exchange rate. The exchange rate is exchange between two
different currencies, which is a comparison of the value or price between the two currencies.
It is important for the country to do the international trade between two countries. The
currency of a State may change substantially because the changes in economic conditions, as
well as non-economic.

Indonesia as developing country that is often gotten impact from the fluctuation of
exchange rate in the recent years, especially with US dollar. In the past 10 years, Indonesia
has ever done the most declining value of rupiah on 2 October, 2015, which has the rupiah
value on Rp. 14.733.

The delining value of rupiah will complicate the business planning. It affects capital
flows or investment and international trade. Indonesia as a country that imports and exports
many industrial raw materials gets the impact from it. Thus the calculation of production
costs become chaotic, then the price of goods will increase. With the declining value of
rupiah the indonesian economy become chaotic and will be hit by the economic crisis and
confidence in the domestic currency.

LITERATURE REVIEW