Most Profitable Currency Exchange for ASEAN Countries Using Dijkstra’s Algorithm

Abstract

On regular basis, most people directly exchange their currency for another in the money changers or banks for business or traveling purposes. However, the indirect conversion approaches are not yet much developed by previous studies for the exchange rate, especially using shortest path algorithms. While Dijkstra’s algorithm is a very well-known approach to solve the shortest path problems. In this paper, the most profitable path is determined using this algorithm. Indonesian Rupiah was considered as an initial node, the positive weights are denoted as distance among currencies. Additionally, these weights are calculated using the ratio between initial and target currencies. By applying initial node and weight values, the proposed Dijkstra graph was constructed for investigating the best currency exchange among ASEAN countries. Results showed Dijkstra’s algorithm able to produce the best path for some selected conversion values such as IDR → BND → MYR → PHP → MMK → KHR, VND → SGD → MYR → PHP → KHR, KHR → BND → MYR → THB → PHP and LAK → SGD → MYR → PHP with maximum profit if compared with direct conversion approach. For future business, traveling, or studying abroad, this proposed approach is very helpful in the risk management of currency fluctuations.