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THE ROLE OF CURRENCY HEDGING ON FIRM PERFORMANCE: A PANEL DATA EVIDENCE IN INDONESIA

Buletin Ekonomi Moneter dan Perbankan · Vol. 17 No. 3 (2015) · hlm. 279–298

DOI
10.21098/bemp.v17i3.39
ISSN
2460-9196, 1410-8046
Terbit
2015-03-27
Penerbit
Bank Indonesia
Bahasa
eng

Abstrak

This paper analyzes the role of currency hedging on non-financial firm’s performance. Most firms on the sample have anticipated the currency mismatch risk by balancing the ratio of foreign debt to their asset fenominated in foreign currency. Using panel estimation, we find that there is no evidence of currency hedging activities to affect capital and performance of firms. The result underlines the low intensity of currency hedging activities due to lack of incentives, which is inline with the low derivative transaction within the underdeveloped foreign currency market. This finding may raise a concern since currently the development of foreign liabilities for non-financial firmsin Indonesia is increasing in significant level, as well as the increase risk of domestic currency depreciation. For these reasons, Bank Indonesia should take proactive policies to deepen foreign currency market as well as derivative market by providing a more comprehensive and market friendly hedging instruments to banks and non-financial firms, while keep promoting the benefit of currency hedging. Keywords: Hedging, derivative market, foreign liability. JEL Classification: F31, G31

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Rekan penulisOrganisasiArtikel bersama
Meily Ika PermataBank Indonesia4
Sri FitrianiBank Indonesia4
Ibrahim IbrahimBank Indonesia2
Tri WinarnoBank Indonesia2
Yan FitriAfiliasi tidak diketahui1
Yanfitri YanfitriBank Indonesia1

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Sumber metadata: OAI-PMH (metadata jurnal) https://www.bmeb-bi.org/index.php/BEMP/oai, pertama di-harvest 8 Nov 2026, terakhir terlihat 8 Nov 2026.
Metadata asli (oai_dc) 
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	<dc:title xml:lang="en-US">THE ROLE OF CURRENCY HEDGING ON FIRM PERFORMANCE: A PANEL DATA EVIDENCE IN INDONESIA</dc:title>
	<dc:creator>Indawan, Fiskara</dc:creator>
	<dc:creator>Fitriani, Sri</dc:creator>
	<dc:creator>Karlina, Indriani</dc:creator>
	<dc:creator>Grace, Melva Viva</dc:creator>
	<dc:description xml:lang="en-US">This paper analyzes the role of currency hedging on non-financial firm’s performance. Most firms on the sample have anticipated the currency mismatch risk by balancing the ratio of foreign debt to their asset&amp;nbsp;&amp;nbsp;fenominated in foreign currency. Using panel estimation, we find that there is no evidence of currency hedging activities to affect capital and performance of firms. The result underlines the low intensity of currency hedging activities due to lack of incentives, which is inline with the low derivative transaction within the underdeveloped foreign currency market. This finding may raise a concern since currently the development of foreign liabilities for non-financial firmsin Indonesia is increasing in significant level, as well as the increase risk of domestic currency depreciation. For these reasons, Bank Indonesia should take proactive policies to deepen foreign currency market as well as derivative market by providing a more comprehensive and market friendly hedging instruments to banks and non-financial firms, while keep promoting the benefit of currency hedging.
Keywords: Hedging, derivative market, foreign liability.
JEL Classification: F31, G31</dc:description>
	<dc:publisher xml:lang="en-US">Bank Indonesia</dc:publisher>
	<dc:date>2015-03-27</dc:date>
	<dc:type>info:eu-repo/semantics/article</dc:type>
	<dc:type>info:eu-repo/semantics/publishedVersion</dc:type>
	<dc:type xml:lang="en-US">Peer-reviewed Article</dc:type>
	<dc:format>application/pdf</dc:format>
	<dc:identifier>https://www.bmeb-bi.org/index.php/BEMP/article/view/39</dc:identifier>
	<dc:identifier>10.21098/bemp.v17i3.39</dc:identifier>
	<dc:source xml:lang="en-US">Buletin Ekonomi Moneter dan Perbankan; Vol 17 No 3 (2015); 279-298</dc:source>
	<dc:source xml:lang="id-ID">Buletin Ekonomi Moneter dan Perbankan; Vol 17 No 3 (2015); 279-298</dc:source>
	<dc:source>2460-9196</dc:source>
	<dc:source>1410-8046</dc:source>
	<dc:language>eng</dc:language>
	<dc:relation>https://www.bmeb-bi.org/index.php/BEMP/article/view/39/486</dc:relation>
	<dc:rights xml:lang="en-US">Copyright (c) 2015 Fiskara Indawan, Sri Fitriani, Indriani Karlina, Melva Viva Grace</dc:rights>
</oai_dc:dc>