THE ANALYSIS ON THE IMPACT OF QUANTITATIVE EASING POLICY BY THE FEDERAL RESERVE DURING THE GLOBAL FINANCIAL CRISIS TO INDONESIAN ECONOMY

Abstract

This study want to see how the unconventional monetary policy which is Quantitative easing-QE by the American central bank The Fed affect the economy of Indonesia.This issue is interesting to study as it is a current issue and related to the current condition of the world econmy and also the Indonesia’s econmy. This study will give an update information about the of current economic conditions. This study is a QUALTITATIVE study and using case study approach and it will only cover about the Indonesia economic condition particulalry the economic conditions after the recent global financial crisis in 2008 as a result from the impact of Quantitative Policy by the Federal Reserve. The study found that there is a carry trade phenomenon as an effect of the QE policy an it is influence the economy of Indonesia particularly the exchange rate of Indonesian Rupiah. The study also found numerous factor that also contribute to the Indonesia’s economy besides the QE which are the current account deficit, fuel subsidy,inflation,corruption, middle-income trap challenge. For the year of 2013 and latter on 2014 Indonesia face some challenge regarding their economy.