Abstract:
The purpose of this paper is focus on the influence of Macroeconomics factors such as BI rate, inflation, and GDP in Indonesia during pandemic COVID 19 towards the bank’s Net Interest Margin through Non performing loan. The reason researcher bring this topic is because there are so many worsening of economic indicators during pandemic era. But researcher tends to choose macroeconomics factor such as BI RATE, inflation and GDP since this indicators change bank’s policy posture especially external factors such as government regulation and real sectors distress more or less will influence bank margin and credit quality which each measurement represents by NIM and NPL. This study is focusing only for bank that have market cap below IDR 20 Trillion. This study uses quantitative method with secondary data. The data was obtained from various official sources such as BPS, IDX, BI, OJK, and so on. The independent variables were BI rate, inflation, and GDP. The intervening variable were non performing loan. Meanwhile the dependent variable were Net Interest Margin Finally, the data analysis use E-views application to examine the purpose of this paper. This study will examine the influence between those independent variables towards dependent variable through intervening variables using quarterly data from 2020Q1-2020Q4 for both variables to see the impact each of those macroeconomics indicators during COVID-19 influence bank’s Net Interest Margin. Research result is BI rate has significant impact on NIM and NPL and NPL as intervening variables didn’t have strong or significant influence to bridge or mediate BI rate towards NIM,Inflation rate has no significant impact on NIM and significant impact on NPL as intervening variables have strong or significant influence to bridge or mediate inflation rate towards NIM which shown by Sobel test. GDP has significant impact on NIM and NPL intervening variables didn’t have strong or significant influence to bridge or mediate GDP towards NIM and NPL has no significant impact on NIM
