Abstract
This study aims to find out and test the partial influence of exchange rate variables, Electronic Money (e-money), interest rates on money supply; and the partial effect of variable exchange rates, e-money, interest rates, and the amount of money supply toward the inflation rate. This research method is quantitative, with a type of causal research. The geographical scope of the study is Indonesia with a six-year period (2012-2017). Based on the periodization, by using monthly data, each variable has 72 data (n = 72), which is 6 years x 12 months. The data used was secondary data. The multiple linear regression analysis was used to test seven hypotheses all of which are bivariate models. The results show that the exchange rate (USD to IDR exchange rate) has a positive and significant effect on the money supply. E-money has a positive and significant effect on the money supply. Interest rates have a negative effect, but are not significant for the money supply. Exchange rates have a negative effect, but not significant to inflation. E-money has a negative effect but not significant on inflation. Interest rates have a positive effect but not significant on inflation. Money supply has a negative effect but not significant on inflation.
Highlights
Inflation is one of the important factors in a country's economy
The research location is in Jakarta, especially at Bank Indonesia (BI) which is located at Jalan MH Thamrin No 2 Jakarta, as well as at the Central Statistics Agency or Badan Pusat Statistik (BPS) which is located at Jalan Doktor Sutomo Number 6-8, Central Jakarta
The result shows that the exchange rates have a positive and significant effect on the money supply that the result of this study is in accordance with hypothesis no. 1
Summary
Inflation is one of the important factors in a country's economy. Changes are always sought at a low level and tend to be stable. Fluctuating inflation conditions can cause an economic unstable effect. High and volatile inflation can cause an increase in prices of goods and services in general and continuously will have implications for the hampered economic growth. For 31 years (1984-2014) Indonesia experienced fairly volatile inflation. Based on data from Bank Indonesia (BI) (2015), the lowest five inflation figures were in 1999 (2.01%), 2009 (2.78%), 2011 (3.79%), 2012 (4.3%), 1985 (4.31%). The problem is that the standard deviation is high, which is 12,923, so this shows that the inflation rate in Indonesia for 31 years tends to fluctuate. The effect of the rupiah exchange rate on US Dollar (USD), electronic money (e-money), interest rates and the money supply is a determinant of the inflation rate
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