Analysis of Current Account and Real Exchange Rate: Lower Middle Income Countries in Association of Southeast Asian Nations 
Hasdi Aimon1, Sri Ulfa Sentosa2, Anggi Putri Kurniadi3
1Hasdi Aimon, Fakultas Ekonomi, Universitas Negeri Padang, Padang, Indonesia.
2Sri Ulfa Sentosa, Fakultas Ekonomi, Universitas Negeri Padang, Padang, Indonesia.
3Anggi Putri Kurniadi, Fakultas Ekonomi, Universitas Negeri Padang, Padang, Indonesia.
Manuscript received on 01 September 2019 | Revised Manuscript received on 10 September 2019 | Manuscript Published on 23 September 2019 | PP: 662-222 | Volume-8 Issue-5C, May 2019 | Retrieval Number: E10930585C19/19©BEIESP | DOI: 10.35940/ijeat.E1093.0585C19
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: The study investigates the simultaneous equation model of the current account and real exchange rates in group of lower middle income in Association of Southeast Asian Nations (ASEAN). This study uses time series from 2000-2017 (18 years) and cross section 6 countries (Indonesia, Philippines, Vietnam, Lao, Myanmar, and Cambodia). There are three important findings in this study; first, for the current account is financial development has positive effect while government spending and foreign direct investment have negative effect; second, for the real exchange rate is economic openness, money supply, and interest rate have positive effect while foreign direct investment and current account have negative effect; third, only current account affects real exchange rates. Therefore, it is highly recommended for group of lower middle income in ASEAN to intervene in monetary policy variables so that uncontrolled deficits and fluctuations can achieve equilibrium in group of lower middle income in ASEAN.
Keywords: Current Account, Real Exchange Rate, Lower Middle Income, ASEAN.
Scope of the Article: Social Sciences