The Effect of Inflation, Indonesian Interest Rate and the Rupiah Exchange Rate on the Movement of the Indonesia Stock Exchange

Abstract

This study aims to determine the effect of inflation, Indonesian interest rates, and the rupiah exchange rate simultaneously and partially on the movement of the Composite Stock Price Index on the Indonesia Stock Exchange (IDX). The theory and previous research that revealed that the IDX movement was influenced by several factors such as the global stock exchange index, the trend of foreign oil price movements, the trend of foreign gold prices, the exchange rate of the country's currency against other countries, interest rates and inflation that was happening in the country. country. In this study, the composite stock price index used is from January 1, 2016 to December 31, 2020. This study uses a causal form and quantitative data. In analyzing the data, the researcher used multiple regression analysis. The error rate used is 5 percent. The researcher also tested the classical assumptions before doing the regression analysis. All data analysis was performed using SPSS version 21 program. From the results of the analysis that has been carried out, it can be concluded that 1) The inflation rate, the Indonesian interest rate and the rupiah exchange rate simultaneously have a significant influence on the movement on the IDX as seen from the calculation significance value of 0.000 which is less than the research significance of 0.05 . 2) Partially, inflation has a significant effect on the IDX based on the calculation significance value of 0.021 which is smaller than the research significance value of 0.05. 3) Partially, the Indonesian interest rate has a significant influence on the movement of the IDX as seen from the calculation significance value of 0.018 which is smaller than the research significance value of 0.05. 4) Partially the rupiah exchange rate has a significant influence on the movement of  the IDX with the results of the calculation of the significance value of 0.036 which is less than the significance value of 0.05. 5) The coefficient of determination (Adjusted R2) is 0.405, which means that 40.5 percent of the IDX can be explained by the three independent variables, namely the inflation rate, the Indonesian interest rate and the rupiah exchange rate simultaneously and the rest is explained by other factors outside the research variables.