THE EFFECTS OF BI RATE, EXCHANGE RATE AND INFLATION RATE TO RETURN ON ASSETS OF BUKU 1 BANKS PERIOD 2014-2017

Abstract

According to Otoritas Jasa Keuangan, a government body who regulates banking and other financial institutions in Indonesia, despite the increasing of net profit made by the commercial banks in Indonesia, the profits made by BUKU 1 banks, the total profit made has decreased year by year from 2014 until 2017. The objective of this study was to find out the effect between macroeconomic factors (BI Rates, Inflation and Exchange Rate) and the profitability shown by ROA of Commercial Banks based on Common Equity 1 (Bank Umum Kelompok Usaha 1 / BUKU 1) or small commercial banks in Indonesia which has the common equity not more than Rp 1,000,000,000,000,00 (1 Trillion Rupiah) for the period 2014-2017. The study done using a multiple regression design which involved determining the significance level of BI Rate, Inflation and Exchange Rate to the ROA levels. The study was done by collecting data from the 10 commercial banks BUKU 1 in Indonesia. The type of data collected was secondary data from their annual financial reports for the period 2014-2017 and the macroeconomic rates (BI Rates, Inflation and Exchange Rate) from Bank Indonesia. The result of the study indicates that BI Rates, Inflation and Exchange Rate have a significant influence to the ROA of BUKU 1 banks for the period 2014-2017.