Track: Optimization

Abstract

The money supply in Indonesia is a problem in the long term economy and is influenced by many factors. This research was conducted with the aim of analyzing the effect of inflation, interest rates, and foreign exchange reserves on the money supply in Indonesia. This research uses multiple linear regression analysis method, and parameter estimation is done by using Ordiary Least Square (OLS) method. The analysis was carried out using secondary data, in the form of time series data from the Indonesian money supply, inflation rates, interest rates, and foreign exchange reserves. The data is obtained from Bank Indonesia (BI), the Central Bureau of Statistics (BPS) and other relevant sources. The results showed that the foreign exchange reserve and interest rate variables simultaneously had a positive and significant effect on the money supply with probability values of 0.0048 and 0.0000. Meanwhile, the inflation rate variable does not have a significant effect on the money supply in Indonesia with a probability value of 0.0645.