The Effect of World Oil Prices, Rupiah Exchange Rate, and Interest Rates on Inflation in Indonesia

Authors

  • Muhammad Pane Universitas Pembangunan Panca Budi
  • Rahmad Sembiring Universitas Pembangunan Panca Budi
  • Annisa Ilmi Faried Universitas Pembangunan Panca Budi

DOI:

https://doi.org/10.37676/jmea.v5i4.1887

Keywords:

Exchange Rate, Interest Rate, Indonesia, Inflation, World Oil Price

Abstract

From January 2016 through February 2026, this research will examine the impact of global oil prices, the rupiah exchange rate, and interest rates (BI-7 Day Reverse Repo Rate) on Indonesia's inflation rate. Applying multiple linear regression to 122 months of observational data, the research used a quantitative approach. There was no significant relationship between inflation and global oil prices (t = 1.754; sig. = 0.082), the rupiah exchange rate (t = -1.570; sig. = 0.119), or interest rates (t = -0.936; sig. = 0.351), according to the partial test findings. All three factors do not significantly affect inflation when taken together, according to the simultaneous test (F test), which revealed a F count of 2.417 with a significance level of 0.070 > 0.05. With an Adjusted R2 of 3.4%, it's clear that variables unrelated to the model dominate inflation dynamics. These results show that the government's and Bank Indonesia's intervention strategy to stabilise energy prices and the exchange rate reduces the impact of external shocks on domestic inflation.

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Published

2026-10-31

How to Cite

Pane, M., Sembiring, R., & Faried, A. I. (2026). The Effect of World Oil Prices, Rupiah Exchange Rate, and Interest Rates on Inflation in Indonesia. Journal of Management, Economic, and Accounting, 5(4), 2731–2738. https://doi.org/10.37676/jmea.v5i4.1887

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