This research aims to analyze the volatility of exchange rate (Rp/US)ontheIndoneβsianeconomy.TheMethodofanalyzeusesAutoregressiveConditionalHeteroscedasticiy(ARCH)/GeneralizedAutoregressiveConditionalHeteroscedasticiy(GARCH)thatwasdevelopedbyArize,(1995)andZainal(2004).Theresultshowthatvolatilityofexchangerate(Rp/US) has extreme point at 1997/1998. At that time, economic crisiswas happen on the Indonesian economy, where the value of exchange rate volatilityRp/US$ have reached at point 0,250