wew.. another day on the train n its starting to rain again.
lets talk about indirect pass-through of exchange rate to inflation. According to theory on inflation targeting framework, exchange rate is "ignored" by central banks in determining the inflation target. well, that is not what happen in indonesia. exchange rate has somewhat influence on inflation targeting. how significant is the influence? I don't know, but governer's board keep mentioning level of rupiah in the newspaper. in my opinion, the effect is quite strong, since indonesian imports is almost as high as its Non oil n gas export. And I Believe, the higher the imports, the higher significancy of er to influence inflation. that's all for now folks...
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