THE INFLUENCE OF INFLATION, EXCHANGE RATE AND INTEREST RATE, ON STOCK PRICE
DOI:
https://doi.org/10.61841/swegaq80Keywords:
Inflation, Exchange Rates, Interest Rates and Stock PricesAbstract
Purpose: This study aims to determine the effect of inflation, exchange rates and interest rates on stock prices.
Design / methodology / approach: The data used in this study is panel data, which is a combination of time series data and cross sections. The sample data of 11 companies were taken from the cross section unit data and time series data for the 2016-2019 period. The analytical method used in this study is the multiple regression analysis model.
Findings: The results show that inflation, interest rates and exchange rate fluctuations will influence the consumers and the world economy, because they will create inefficiencies and distort prices. High inflation and interest rates will cause company sales to decrease and capital costs to rise, so company profits will decline which will have an impact on the company's stock price. High inflation and interest rates will also affect the decline in a country's exchange rate. In the condition of a country with a high inflation rate, this export-oriented company will benefit from an increase in sales value. Conversely for importing companies, changes in exchange rates will cause an increase in production costs, consequently the company's profits will decrease which will cause a decline in share prices and increased losses suffered due to differences in exchange rates between countries.
Practical implications: This research is expected to be useful for managers in making decisions
Originality / value: this study different from previous studies because it examines the simultaneous effect of inflation, exchange rates and interest rates on stock prices.
Downloads
References
[1] Alam, Md. Mahmudul, Uddin, Md. Gazi Salah, 2019. Relationship between Interest Rate and Stock Price:
Empirical Evidence from Developed and Developing Countries. International Journal of Business and
Management, Vol. 4(3), pp. 43-51,
[2] Almeida, M. I. R. (2001). Manual de planejamento estratégico. São Paulo: Atlas.
[3] Fauziah, Moeljadi, Kusuma Ratnawati, 2015. Dynamic Relationship between Exchange Rates and Stock Prices in
Asia, 2009‐2013. Journal of Economics, Finance and Accounting – (JEFA), Vol.2 (1), pp 124 – 134
[4] Anna. 2019. Pengaruh suku bunga terhadap pasar saham. https://investasi.online/pengaruh-suku-bunga-terhadappasar-saham/
[5] Gujarati, Damodar N. 2006. Dasar-Dasar Ekonomometrika, Jilid I. Alih Bahasa: Julius A. Mulyadi S.E. Jakarta:
Erlangga.
[6] Irvin Avriano Arief. 2019. https://www.cnbcindonesia.com/market/20191031085616-17-111546/ihsg-belummove-on-dan-ditinggal-indeks-lain-apa-alasannya.
[7] Haseeb, M., Kot, S., Hussain, H. I., Mihardjo, L. W., & Saługa, P. (2020). Modelling the Non-Linear Energy
Intensity Effect Based on a Quantile-On-Quantile Approach: The Case of Textiles Manufacturing in Asian
Countries. Energies, 13(9), 2229.
[8] Malgwi A A & Dahiru. H. 2014. Balanced Scorecard financial measurement of organizational performance: A
review, IOSR Journal of Economics and Finance (IOSR-JEF), PP 01-10.
[9] Maximiano, A. C. A. (2008). Teoria geral da administração (6a ed.). São Paulo: Atlas.
[10] Mirza, Aimal Rashidi , Meetra, 2018. Causal Relationship between Interest Rate and Inflation Rate: A study of
SAARC Economies. Kardan Journal of Economics and Management Sciences, Vol.1(2), pp 157 – 169.
[11] Puspitaningtyas, 2017. Is Financial Performance Reflected in Stock Prices?, Advances in Economics, Business and
Management Research, volume 40, pp 17-28
[12] Samsul, Mohamad. 2006. Pasar Modal dan Manajemen Portofolio. Jakarta: Erlangga.
[13] Suparmoko. 2006. Ekonomi. Bogor: Quadra.
[14] Shalishali ,Maurice K., Ho ,Johnny C., 2002. Inflation, Interest Rate, and Exchange Rate: What is The
Relationship?
[15] Sufian, F., & Kamarudin, F. (2014). The impact of ownership structure on bank productivity and efficiency:
Evidence from semi-parametric Malmquist Productivity Index. Cogent Economics & Finance, 2(1), 932700.
[16] Tandelilin, Eduardus. 2010. Portofolio dan Investasi Teori dan Aplikasi: Edisi Pertama. Yogyakarta: Kanisius.
[17] Tiur Novi Rossy. 2018. Pengaruh nilai Tukar (kurs) Rupiah dan Tingkat Inflasi terhadap Harga Saham Pada Sub
Sektor Perbankan di Bursa Efek Indonesia (BEI). JOM FISIP Vol. 5: Edisi I Januari – Juni 2018
[18] Wawan Hendrayana. 2018. Saham dan Suku Bunga.https://www.infovesta.com/index/article/articleread;jsessionid
[19] Zaroni. Senior Consultant at Supply Chain Indonesia. 2015. http://supplychainindonesia.com/new/menilaikinerja-perusahaan/Menilai Kinerja Perusahaan
[20] Zul Afni. (2011). Pengaruh Kinerja Perusahaan Terhadap Harga Saham Perusahaan Manufaktur Yang Go Publik di BEI. fakultas ekonomi. http://repo.unand.ac.id/1052/
Downloads
Published
Issue
Section
License
Copyright (c) 2020 AUTHOR
This work is licensed under a Creative Commons Attribution 4.0 International License.
You are free to:
- Share — copy and redistribute the material in any medium or format for any purpose, even commercially.
- Adapt — remix, transform, and build upon the material for any purpose, even commercially.
- The licensor cannot revoke these freedoms as long as you follow the license terms.
Under the following terms:
- Attribution — You must give appropriate credit , provide a link to the license, and indicate if changes were made . You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
Notices:
You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation .
No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.
