Research Article
Exchange Rates and Financial Performance Effect on Conventional Bank Third Party Funds in Indonesia
@INPROCEEDINGS{10.4108/eai.3-8-2021.2315092, author={Dini Hariyanti and Soeharjoto Soeharjoto and Debbie Aryani Tribudhi}, title={Exchange Rates and Financial Performance Effect on Conventional Bank Third Party Funds in Indonesia}, proceedings={Proceedings of the First Lekantara Annual Conference on Public Administration, Literature, Social Sciences, Humanities, and Education, LePALISSHE 2021, August 3, 2021, Malang, Indonesia}, publisher={EAI}, proceedings_a={LEPALISSHE}, year={2022}, month={1}, keywords={third party funds; exchange rate; financial performance}, doi={10.4108/eai.3-8-2021.2315092} }- Dini Hariyanti
Soeharjoto Soeharjoto
Debbie Aryani Tribudhi
Year: 2022
Exchange Rates and Financial Performance Effect on Conventional Bank Third Party Funds in Indonesia
LEPALISSHE
EAI
DOI: 10.4108/eai.3-8-2021.2315092
Abstract
Banks are intermediary institutions that help economic activities require cheap funds from Third Party Funds. Based on Business Activities IV book in Conventional Banks, commercial banks can still compete in the financial market, but with the volatility of Exchange Rates and Financial Performance will affect people's decisions in save their funds in the bank. Aims of this study is to find out the factors that affect Third Party Funds. Used monthly data from 2017-2020, with Error Correction Model as analysis regression method. Third Party Funds is dependent variables and Return on Assets (-1), Loan to Deposit Ratio, Interest, Net Interest Margin, and Exchange Rate are independent variable. Results shown, in short and long term, Exchange Rate has a positive and significant impact on Third Party Funds. In short terms, Net Interest Margin has a positive and significant effect on Third Party Funds, but not in the long term. Loan to Deposit Ratio negatively and significantly affects Third Party Funds in the short term but not in the long term. Return on Assets (-1) and Interest have no effect on Third Party Funds in the short and long term. Peoples who save their funds in the bank, think rationally, it is more concerned with the profit obtained with a small risk. Banks, governments, and international banking institutions need to maintain public trust by coordinating and cooperating intensively.
