THE EFFECT OF LENDING INTEREST RATE POLICY ON THE RUPIAH EXCHANGE RATE IN INDONESIA (2015-2024)
DOI:
https://doi.org/10.65886/ijde.v2i01.19Keywords:
Rupiah exchange rate, credit interest rate, multiple linear regression, cointegration; error correction model (ECM)Abstract
This study aims to analyze the influence of credit interest rate
policy on the rupiah exchange rate in Indonesia in the period
2015–2024. The main focus of this study is to identify how Bank
Persero's three types of credit interest rates, namely for
investment, working capital, and consumption, affect the rupiah
exchange rate in the short and long term. The research method
used is a quantitative approach with multiple linear regression
analysis and cointegration tests, as well as an error correction
model (ECM). The regression results show that the interest rate
on investment loans has a significant positive effect on the
logarithm of the rupiah exchange rate, which indicates
depreciation pressure. On the other hand, the interest rate on
working capital and consumption loans has a significant negative
effect on the exchange rate, indicating a tendency to appreciate
the rupiah. The cointegration test proved the existence of a long
term relationship between variables, although the ECM results
showed that in the short term, the effect of the three interest rates
was not significant. This research provides important implications
for monetary authorities in formulating appropriate interest rate
policies based on credit types to maintain exchange rate stability.
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