Inflation, Interest Rate, and Exchange Rate for their Effect on Profitability and the Implications on Corporate Value: Case Studies in National Banking 2014 until 2019

Abstract

The purpose of this study is to see how much inflation-interest and exchange rates could affect profitability and or whether the correlation-between profitability affects the corporate's book value. The research sample consisted of seven large Indonesian national banks with authorized capital above 10 trillion rupiahs with an observation period from 2014 to 2019. Data processing using Eviews 9 software, quantitative using regression linear multiple regression techniques. They indicate that inflation does not have a significant positive impact which is proxied by profitability. Interest rates have a positive but not significant to Profitability, Value Exchange does not have a positive effect significantly on Profitability and Profitability has a significant positive influence on the Corporate’s Book Value.