THE ANALYSIS OF CURRENT ACCOUNT BALANCE SYSTEM IN INDONESIA.

Abstract

This study investigates the current account balance system in Indonesia. We employed multiple regression analysis approach to explain the relationship between dependent variable and independent variables. This study entirely used time series secondary data from 1981 up to 2016. The condition of current account balance system is inseparable from the macroeconomic indicators. The results from this study are national income, real exchange rate, inflation, and financial development have negative affect and significant to current account balance system. Further, foreign direct investment has positive affect and significant to current account balance system. however financial development has negative affect but not significant to current account balance system. This research is recommended to the government to be able to increase the flow of foreign direct investment in Indonesia, because it is a major factor in improving the condition of current account balance system