How Do Inflation, Exchange Rates, and Interest Rates in the US Affect Textile Imports from Indonesia?

This study examines the impact of US macroeconomic variables: inflation, exchange rates, and interest rates, on textile imports from Indonesia. Using time-series data from 2010 to 2023 and the Ordinary Least Squares (OLS) method, the research analyzes how these factors influence import volumes. The results indicate that US inflation has a positive but insignificant effect, while exchange rates show a negative yet insignificant impact. In contrast, the Federal Reserve's interest rate has a significant negative effect, suggesting that higher US interest rates reduce textile imports from Indonesia. The adjusted R-squared value of 28.068% indicates that other external factors not included in the model may also play a critical role. These findings provide insights for industry stakeholders and policymakers to develop strategies mitigating risks associated with US macroeconomic fluctuations, such as diversifying export markets and enhancing production efficiency.