Effect of inflation and exchange rates on stock prices in banking sub-sector companies listed on The Indonesian Stock Exchange

Abstract

Purpose: This study aims to determine the influence of inflation variables and exchange rates on share prices. Method: This study used quantitative methods. The population in this study was 47 banking subsector companies listed on the Indonesian Stock Exchange for the 2019-2023 period. The sample in this study comprised 15 companies with 75 financial reports. This research uses classical assumption tests such as the normality test, multicollinearity test, autocorrelation test and heteroscedasticity test, coefficient analysis, coefficient of determination analysis and hypothhesis testing consisting of the t test and f test. Results: The results of this research show that inflation has a partial and significant effect on share prices in banking subsector companies listed on the Indonesian Stock Exchange for the 2019-2023 period because it has a sig. 0.000 < 0.05, and the exchange rate has a significant effect on share prices in banking subsector companies listed on the Indonesian Stock Exchange for the 2019-2023 period because it has a sig value. 0.000 < 0.05. Simultaneously, the effect on share prices in banking subsector companies listed on the Indonesian Stock Exchange for the 2019-2023 period beccause they have sig. equal to 0.000 < 0.05. Limitations: The object of the research is only banking sub-sector companies listed on the Indonesia Stock Exchange for the 2019–2023 period and only includes inflation, exchange rates, and stock prices Contribution: This research aims to contribute to science at the Faculty of Economics and Business, provide reading materials in the library of the University of PGRI Palembang about inflation and exchange rates on the stock prices of companies in the banking sub-sector on the Indonesia Stock Exchange for the 2019-2023 period, and increase the company's insight into the development of stock prices related to inflation and exchange rates.