The Influence of Exchange Rate, International Interest Rate and Inflation Rate on Lending and Deposit Rate of Indonesia Banking Sector Through Reference Policy Rate as Intervening Variable

The determination of bank interest rates that consist of lending rate and deposit rate is a crucial decision for the bank business as a financial intermediary. The banks must take into account the underlying factors that influencing their interest rate determination. This research examines the influence of foreign factors and domestic factor on lending and deposit rate through a reference policy rate called BI 7-day (reverse) repo rate as an intervening variables. Foreign factors are represented by exchange rate Rupiah against USD and international interest rate called Singapore Interbank Offer Rate (SIBOR). Domestic factor is represented by inflation rate. BI 7-day (reverse) repo rate is determined by Bank Indonesia as a new reference rate for the banks to determine their lending and deposit rate. It must be noticed carefully by the banks because it shows the direction of monetary policy from Bank Indonesia to stabilize economy, especially inflation. Model of path analysis is applied to estimate the monthly series data from September 2016 to December 2018. The result shows that the exchange rate has a positive and significant influence on BI 7-day (reverse) repo rate. Inflation rate and SIBOR has negative and insignificant influence on BI 7-day (reverse) repo rate. Both lending rate and deposit rate are influenced positively and significantly by BI 7-day (reverse) repo rate but the influence on lending rate is stronger than on deposit rate. Simultaneously, all foreign and domestic factors influence significantly on lending rate and deposit rate. It can be concluded that BI 7-day (reverse) repo rate as a new reference policy rate has been transmitted well to the banking sector in the form of determination of lending and deposit rate

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Macroeconomic Dynamics, Bank-specific Factors and Deposit Mobilization of the Nigerian Banking Sector

Asian Journal of Economics Business and Accounting ◽

10.9734/ajeba/2019/v12i230146 ◽

2019 ◽

pp. 1-16

Author(s):

Azolibe, Chukwuebuka Bernard

Keyword(s):

Exchange Rate ◽

Interest Rate ◽

Inflation Rate ◽

Banking Sector ◽

Government Expenditure ◽

Macroeconomic Dynamics ◽

Lending Rate ◽

Specific Factors ◽

Nigerian Banking ◽

Bank Specific Factors

This study critically examined the nexus between macroeconomic dynamics, bank-specific factors and deposit mobilization of the Nigerian banking sector. Macroeconomic dynamics was proxied by inflation rate, lending rate, exchange rate, government expenditure, unemployment rate and Gross domestic product (GDP) while bank-specific factors was proxied by deposit interest rate, branch network expansion and bank’s liquidity. The study which is ex-post facto, relied mostly on secondary data which were collected through the Central Bank of Nigeria (CBN) and National Bureau of Statistics (NBS) statistical bulletin from 1985-2018. Multiple regression Ordinary Least Square (OLS) statistical tool was applied to establish the like fit to the observed data and the degree of relationship that exist between variables. The granger causality test was employed to establish the causal relationship between the variables. Findings revealed among others that inflation rate measured by the consumer price index and deposit interest rate have negative and significant relationship with deposit mobilization in Nigeria. Exchange rate, unemployment rate and loan-to deposit ratio have negative and insignificant relationship. Lending rate and Government expenditure have insignificant positive relationship while it was only Gross domestic product and number of bank branches that have positive and significant relationship with deposit mobilization in Nigeria. It was recommended among others that deposit interest rate should be fixed based on the level of customer’s deposit so as to act as compensation against the rising trend in inflation rate and also, banks should be more socially responsive by partnering with the Government and other private sectors in sponsoring various entrepreneurship and skill acquisition training programmes in the country that are employment driven. This will ensure that a good number of the unemployed persons are into paid employment and are earning. This will in turn boost their deposit base.

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The Impact of Macroeconomic Variables on Sectoral Indices in Indonesia

ETIKONOMI ◽

10.15408/etk.v16i1.4323 ◽

2017 ◽

Vol 16 (1) ◽

pp. 71-80 ◽

Cited By ~ 2

Author(s):

Bambang Sutrisno

Keyword(s):

Exchange Rate ◽

Interest Rate ◽

Inflation Rate ◽

Emerging Market ◽

Estimation Method ◽

Least Square ◽

Series Data ◽

Macroeconomic Variables ◽

The Interest Rate ◽

The Impact

This study aims to examine the effect of macroeconomic variables on sectoral indices in the Indonesian Stock Exchange. The difference in sensitiveness among sectors is an interesting issue to investigate this relationship in an emerging market, such as Indonesia. This study employs ordinary least square (OLS) as an estimation method with monthly time-series data from January 2005 to December 2014. The results document that the interest rate, inflation rate, and exchange rate simultaneously have a significant effect on sectoral indices in Indonesia. The interest rate partially shows a significant negative influence on all sectors except basic industry and chemical, finance, infrastructure, utilities, and transportation, and miscellaneous industry sectors. The inflation rate partially has no significant effect on all sectors. The exchange rate partially has a significant negative impact on all industries.DOI: 10.15408/etk.v16i1.4323

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DAMPAK KEBIJAKAN MONETER TERHADAP STABILITAS RUPIAH

EKUITAS (Jurnal Ekonomi dan Keuangan) ◽

10.24034/j25485024.y2011.v15.i3.2304 ◽

2017 ◽

Vol 15 (3) ◽

pp. 416

Author(s):

Azhar Bafadal

Keyword(s):

Exchange Rate ◽

Interest Rate ◽

Money Supply ◽

Inflation Rate ◽

Series Data ◽

Small Magnitude ◽

Long Run ◽

The Exchange Rate ◽

The Interest Rate ◽

The Impact

This research aimed to study the impact of monetary policy on the rupiah stability. Variables used were the interest rate of Bank Indonesia Certificate (SBI), the rate of inflation (IHK), the exchange rate of rupiah against the US dollar (Kurs) and the money supply in the narrow sense (M1). Data used were of quarterly time series data of Bank Indonesia and Central Bureau of Statistic, covering 2002.1-2010.4. The analysis was undertaken by using a vector autoregression model (VAR), through the Impulse Response Function (IRF) and Forecast error variance decomposition (FEVD). The research results showed that in the sort run shocks of SBI decreased the inflation rate, and in the long run the inflation rate was constant. The exchange rate tended to be appreciated in the short run and long run although in a small magnitude. Money supply decreased with a minor fluctuation. Initially, the money supply shocks increased the interest rate of SBI, but decreased in the long run. The rate of inflation fluctuated in the sort run but it was constant in the long run. The exchange rate was depreciated both in the sort run and in the long run.

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Loom of Symmetric Pass-Through

Economies ◽

10.3390/economies7010011 ◽

2019 ◽

Vol 7 (1) ◽

pp. 11

Author(s):

Afsin Sahin

Keyword(s):

Exchange Rate ◽

Interest Rate ◽

Real Exchange Rate ◽

Stock Prices ◽

Real Interest Rate ◽

Deposit Rate ◽

The Real ◽

Lending Rate ◽

Lending Rates ◽

Pass Through

This paper analyzes the effects of the real policy interest rate on the banking sector lending rate, the deposit rate, real stock prices, and the real exchange rate using the Engle Granger cointegration method (EG), the vector error-correction model (VECM), and the nonlinear vector error-correction model (NVECM) with monthly Turkish data over the period January 2002–April 2018. (1) EG results indicate bivariate cointegration relationships between the real interest rate, lending rates, and the deposit rate. The real interest rate increases all lending rates, mainly the housing rate. However, the long-run coefficient for the real exchange rate is not statistically significant. The pass-through is higher for the deposit rate than for lending rates. Moreoever, real stock prices shrink substantially where the finance sector has been affected the most. (2) VECM results indicate a cointegration relationship between all the variables except for the real exchange rate, which has a statistically non-significant pass-through coefficient. The real interest rate has a noteworthy long-run positive effect on the housing loans lending rate compared to others. The affirmative effect on real stock prices is the highest for the technology sector. The short-run effect of the real interest rate on lending rates, real stock prices and the real exchange rate are statistically non-significant except for the overall stock price index, and the vehicle loans lending rate which has a higher coefficient than the deposit rate. (3) NVECM results allow testing of eleven hypotheses and highlight the symmetric relationship and the valid pass-through effect, and reject the strong exogeneity assumption for all variables.

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DAMPAK KEBIJAKAN MONETER TERHADAP STABILITAS RUPIAH

EKUITAS (Jurnal Ekonomi dan Keuangan) ◽

10.24034/j25485024.y2011.v15.i3.376 ◽

2018 ◽

Vol 15 (3) ◽

pp. 416-433

Author(s):

Azhar Bafadal

Keyword(s):

Exchange Rate ◽

Interest Rate ◽

Money Supply ◽

Inflation Rate ◽

Series Data ◽

Small Magnitude ◽

Long Run ◽

The Exchange Rate ◽

The Interest Rate ◽

The Impact

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Exploring the Nexus; Stock Market, T. Bills, Inflation, Interest Rate and Exchange Rate

Journal of Economics and Behavioral Studies ◽

10.22610/jebs.v4i7.339 ◽

2012 ◽

Vol 4 (7) ◽

pp. 384-389

Author(s):

Syed Imran Sajjad ◽

Saleem Ullah Jan . ◽

Madiha Saddat . ◽

Ijaz ur Rehman .

Keyword(s):

Developing Countries ◽

Exchange Rate ◽

Interest Rate ◽

Stock Market ◽

Granger Causality ◽

Inflation Rate ◽

Economic Indicators ◽

Stock Index ◽

Series Data ◽

Treasury Bills

The main objective of this study is to examine the relationship between Karachi stock exchange and macroeconomic variables i.e. inflation rate, exchange rate, treasury bills and interest rate. Monthly time series data from January 2005 to December 2010 have been used to investigate the causal association among macroeconomic indicators and Karachi stock market. The co-integration test and Granger Casualty have been applied to drive the short and long-term investigation. The results found bi directional Granger causality among KSE and exchange rate and One way Granger causality exists among KSE and interest rate, no Granger causality found among KSE and inflation rate and KSE and treasury bills. Which means performance of macro-economic variable somehow affects the stock index; moreover, stock prices in Pakistan do not reflect the macro-economic condition of the country. This study emphasizes on the crash of macro-economic indicators on the capital market performance of developing countries. The performance of capital markets of developing countries calculated by these macro-economic indicators.

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ANALISIS RIGIDITAS LENDING RATE PERBANKAN DI INDONESIA PERIODE JANUARI2001 - JUNI2004

Jurnal Ekonomi Pembangunan Kajian Masalah Ekonomi dan Pembangunan ◽

10.23917/jep.v5i2.4042 ◽

2017 ◽

Vol 5 (2) ◽

pp. 193

Author(s):

Sutomo Sutomo ◽

Johadi Johadi

Keyword(s):

Exchange Rate ◽

Interest Rate ◽

Commercial Bank ◽

Banking Sector ◽

Secondary Data ◽

Bank Lending ◽

Lending Rate ◽

Response Change ◽

Independent Variable ◽

The Difference

The research aim's to know the influence of interest rate ofSBI, exchange rate, total bank lending, supply of funds and commercial bank amount to rigidly bank lending rate in Indonesian period of January 2001 until June 2004. The research use secondary data by character of time series. The research methodology used a partial adjustment model that rigidly bank lending rate are influence by all independent variable such interest rate of SBI, exchange rate, and total bank lending, supply of fund and commercial bank amount in banking sector. The empirical results that rigidly bank lending rate are influenced by all independent variable are collectively such interest rate of SBI, exchange rate, and total bank lending, supply of fund and commercial bank amount in banking sector. But as partial, rigidly bank-lending rate are influenced by an interest rate of SBI, exchange rate, total bank lending and supply of funds and commercial bank amount, which don't have an effect to rigidly bank lending rate.The result that is suitable with the theory, where monetary instrument (interest rate of SBI) can be used to influence bank-lending rate as process transmission mechanism monetary policy by price channel approach. Adjustment coefficient is equal to 0,5484 which meaning 54,84 % represents the difference between bank lending rate actual with bank lending rate that desired which fulfilled to be reached in one period, where speed of adjustment bank lending rate in response change of independent variable equal to 5 months 27 day, with mean lag independent variable equal to 1,1812867 months.

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Determinants of small and medium scale enterprises financing by the banking sector in Nigeria: a macroeconomic perspective

Investment Management and Financial Innovations ◽

10.21511/imfi.13(1-1).2016.04 ◽

2016 ◽

Vol 13 (1) ◽

pp. 170-175 ◽

Cited By ~ 1

Author(s):

Patrick Olufemi Adeyeye ◽

Bolanle Aminah Azeez ◽

Olufemi Adewale Aluko

Keyword(s):

Monetary Policy ◽

Interest Rate ◽

Commercial Banks ◽

Inflation Rate ◽

Banking Sector ◽

Financial Deepening ◽

Medium Scale ◽

Interest Rate Spread ◽

Lending Rate ◽

Macroeconomic Indicators

This study assesses from a macroeconomic perspective the determinants of small and medium scale enterprises (SMEs) financing by the banking sector in Nigeria between 1992 and 2014. The empirical model specifies commercial banks’ lending to SMEs as a function of selected macroeconomic indicators which include commercial banks’ total deposits, financial deepening, interest rate spread, lending rate, monetary policy rate, commercial banks’ total assets and inflation rate. The 2SLS estimation results show that only commercial banks’ deposit mobilization, depth of the financial sector and size of the banking sector act as determinants of SMEs financing by commercial banks

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Analysis of the Influence of Interest Rate, Rupiah Exchange Value, Household Consumption, and Import on Inflation in Indonesia Period 2010.Q1 - 2018.Q4

International Journal of Science and Management Studies (IJSMS) ◽

10.51386/25815946/ijsms-v3i6p106 ◽

2020 ◽

pp. 81-91

Author(s):

Jusmer Sihotang ◽

Nancy Nopeline

Keyword(s):

Exchange Rate ◽

Interest Rate ◽

Time Series Data ◽

Household Consumption ◽

Series Data ◽

Multiple Regression Equation ◽

Exchange Value ◽

The Government ◽

The Interest Rate

This study aims to analyze the effect of the interest rest, the exchange rate of the rupiah, and imports on the inflation in Indonesia. The study used multiple regression equation by using secondary time series. Data from 2008.Q1-2018.Q4. The results showed that the interest rate of SBI, exchange rate of rupiah against US Dollar, private sector household consumption, and the total imports of Indonesia had a simultaneous impact on the inflation in Indonesia. However, partially only the interest rate of SBI and total imports of Indonesia had a significant impact on the inflation in Indonesia, respectivelyon the level ofα = 1% and α= 5%. These results mean that the increasing of interest rate of SBI and Indonesian import could impact the inflation rate in Indonesia. Based on the findings, the policy to control the inflation in Indonesia was Bank Indonesia as the holder of monetary policy needs to oversee the determination of business credit interest rate (micro, retail, and corporate), by commercial banks in order to maintain the rate on the stable and low levels. In addition, the government needs to compose the policy to reduce the dependence on imported goods by providing various facilities and incentives to increase the interest of entrepreneurs to invest in industries that produce imported substitute goods.

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PENGARUH TINGKAT INFLASI, SUKU BUNGA BI, DAN NILAI TUKAR RUPIAH TERHADAP RETURN ON ASSET PERBANKAN

Jurnal Akuntansi Bisnis ◽

10.30813/jab.v14i1.2363 ◽

2021 ◽

Vol 14 (1) ◽

Author(s):

Anisyah Fitriany ◽

Achmad Nawawi

Keyword(s):

Exchange Rate ◽

Interest Rate ◽

Interest Rates ◽

Financial Services ◽

Inflation Rate ◽

Financial Statements ◽

Coefficient Of Determination ◽

Test Results ◽

Return On Assets

ABSTRACT: This research aims to find out how inflation, BI interest rates, and rupiah exchange rates affect the return on assets of persero banks in Indonesia. The method used in this research is descriptive and verifikative research method. The data was obtained from the financial statements of persero banks, consisting of Bank Mandiri, Bank Tabungan Negara, Bank Negara Indonesia, and Bank Rakyat Indonesia which were published on the official website of the Financial Services Authority during the quarter of 2017 to the quarter of 2019. Sampling in this study is based on saturated sampling techniques, i.e. all members of the population are sampled. The data in this research is processed using SPSS software. Data processing and analysis techniques use multiple regression analysis. The results of this study showed that together (simultaneously) independent variables of Inflation Rate, BI Interest Rate, and Rupiah Exchange Rate had a significant effect on Bank Persero's ROA in Indonesia in 2017-2019. The test results partially showed that the Variable Inflation Rate negatively and significantly affects return on assets at the persero banks registered with the Financial Services Authority for the period 2017-2019, bi interest rate variables have no effect on Return On Assets on persero banks registered with the Financial Services Authority for the period 2017-2019, rupiah exchange rate variables have a positive and significant effect on Return On Assets on persero banks registered with the Financial Services Authority for the period 2017-2019. Based on the test results determining the amount of coefficient of determination of 18% while the remaining 82% is explained by other variables that are not included in the regression model equation.Keywords: Inflation Rate, Bi Interest Rate, Rupiah Exchange Rate, Return On Assets ABSTRAK: Penelitian ini bertujuan untuk mengetahui bagaimana pengaruh inflasi, suku bunga BI, dan nilai tukar rupiah terhadap return on asset bank persero yang ada di Indonesia. Metode yang digunakan dalam penelitian ini adalah metode penelitian deskriptif dan verifikatif. Data diperoleh dari laporan keuangan bank persero, yang terdiri dari Bank Mandiri, Bank Tabungan Negara, Bank Negara Indonesia, dan Bank Rakyat Indonesia yang publikasi di website resmi Otoritas Jasa Keuangan selama triwulan tahun 2017 sampai dengan triwulan tahun 2019. Pengambilan sampel dalam penelitian ini didasarkan pada teknik sampling jenuh, yaitu semua anggota populasi dijadikan sampel. Data dalam penelitian ini diolah menggunakan software SPSS. Teknik pengolahan dan analisis data menggunakan analisis regresi berganda. Hasil dari penelitian ini menunjukkan hasil bahwa secara bersama-sama (simultan) variabel independen Tingkat Inflasi, Suku Bunga BI, dan Nilai Tukar Rupiah berpengaruh signifikan terhadap ROA Bank Persero di Indonesia tahun 2017-2019. Hasil pengujian secara parsial menunjukkan hasil bahwa variabel Tingkat Inflasi berpengaruh negatif dan signifikan terhadap Return On Asset pada bank persero yang terdaftar di Otoritas Jasa Keuangan periode 2017-2019, variabel Suku Bunga BI tidak memiliki pengaruh terhadap Return On Asset pada bank persero yang terdaftar di Otoritas Jasa Keuangan periode 2017-2019, variabel Nilai Tukar Rupiah berpengaruh positif dan signifikan terhadap Return On Asset pada bank persero yang terdaftar di Otoritas Jasa Keuangan periode 2017-2019. Berdasarkan hasil uji determinasi besarnya koefisien determinasi sebesar 18% sedangkan sisanya 82% dijelaskan oleh variabel lain yang tidak dimasukkan dalam persamaan model regresi.Kata Kunci: Tingkat Inflasi, Suku Bunga BI, Nilai Tukar Rupiah, Return On Assets.

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