Influence of Political Events, Inflation, and the Exchange Rate on Credit Growth of Commercial Banks

Abstract

This study aims to analyses the influence of election political events, inflation and the exchange rate on credit growth of Commercial Banks with Loan to Deposit Ratio (LDR) as a moderating variable. The research data is secondary data, quantitative, panel data obtained from observations for five years, from May 2014 to June 2019. The study population is all Commercial Banks listed on the Indonesia Stock Exchange and has never been delisted from May 2014 to June 2019 totaled 31 Conventional Commercial Banks, the research sample was 23 banks using the purposive sampling method. Data analysis using panel data regression Least Square Dummy Variable with 1426 observations. The results of the study found that there was a positive and non-significant effect of election political events on credit growth, a positive and significant effect of inflation on credit growth, and a negative and nonsignificant effect of the rupiah exchange rate on credit growth. Simultaneous testing, there is a significant influence of the three independent variables on the loan growth dependent variable, while testing by including the LDR moderating variable, there is a positive and non-significant effect of the LDR on the influence of the independent variables on the dependent variable.