Effect of Deposit Interest Regional Development Bank, Deposit Interest Rate Government Bank, Inflation, GDP and Money Supply Against Exchange Rate US Dollar

Abstract

The purpose of this study is to analyze the effect of Deposit Interest Rate Regional Development Bank, Bank Deposit Interest Rate Government, Inflation, Economic Growth (Real GDP), and the money supply of the rupiah per US dollar. The study uses panel data regression analysis with the model Random Effects Model (REM) method and Pooled EGLS (cross section random effects). The results show that factors of interest rate Regional Development Bank, the interest rate on deposits Bank government, the level of inflation, economic growth, money supply have the simultaneous and significant impact on the rupiah per US dollar. While the partial test results show that the interest rate on deposits BPD and the amount of money circulating have a significant negative effect on the rupiah per US dollar. While variable economic growth (GDP) has insignificant negative impact on the rupiah per US dollar.

The Impact of Divisia Money on Monetary Model of Exchange Rate in Indonesia

“…Only the real income differential Granger-cause the exchange rate, which implies that the impact of the money supply on the exchange rate is sluggish, which is consistent with the finding of the EC coefficient value. Money supply does not possess significant effect on the exchange rate since Indonesia implement floating exchange rate system (Marlissa, 2016), in which the exchange rate is also affected by the market responses. Consequently, only income differential can affect the exchange rate in the short run.…”