THE INFLUENCE OF INFLATION, INTEREST RATES AND EXCHANGE RATES ON THE PERFORMANCE OF THE INDONESIAN CAPITAL MARKET

Abstract

This study aims to contribute to the understanding of the relationship between inflation, interest rates, and exchange rates with the performance of the Indonesian capital market.  This research design is an explanatory quantitative study with the aim to determine the effect of interest rates, inflation, and exchange rates on capital market performance. The research sample includes 132 time series data on capital market performance, interest rates, inflation, and Rupiah exchange rates from 2013 to 2023. Sampling using saturated sampling method, resulting in a total of 132 samples. Data analysis was conducted using multiple linear regression analysis using the Statistical Program for Social Sciences (SPSS) 20. The results showed that inflation, interest rates, and rupiah exchange rates simultaneously had a significant effect on capital market performance with a coefficient of determination of 0.442, indicating that 44.2% of capital market performance variability could be explained by these three factors. Partially, inflation has no significant impact on capital market performance, interest rate has a significant negative impact on capital market performance, while the rupiah exchange rate has a significant positive impact.