The Impact of Mandatory Use of Rupiah Currency to Indonesia Trade Value Competitiveness

Volatility of Rupiah's exchange rate to Foreign Currency in 2015 was indicated by Rupiah's depreciation. The purpose of this paper is to see how the implementation of mandatory use of Rupiah in Indonesia affects factors that cause its depreciation. In this paper, descriptive analysis and econometric analysis will be used to demonstrate and explain the impact of some variables to the amount of money circulated in the market. Bank Indonesia's Regulation Number: 17/3/PBI/2015 was issued on March 31, 2015 and Circular Letter Number: 17/11/DKSP was issued on June 1, 2015 that it require mandatory on the use of Rupiah in Indonesia territory. The policy consists of economic, nationalism, and law perspectives. However, this paper focus only on the economic side with the main objective to see how it contributes to Rupiah's stability. By analysing quantitatively and qualitatively data by using statistic procedure and simulation, this paper able to show the effect of policy measure on the financial condition as an aggregate figure during the period of research time