The Relationship Between Macroeconomy Factors and Indonesian Banks’ Financial Sustainability

Abstract

This research analysed the relationship between macroeconomy factors and Indonesian banks’ financial sustainability during 2011-2015. The macroeconomy factors used in this research are BI rate, inflation, money supply, and exchange rate. Meanwhile, to calculate banks’ financial sustainability, FSR was used. The analysis was made on 6 groups of conventional banks using multiple regression with panel data method. The result of this research showed that as a whole, macroeconomy factors have a relationship with banks’ financial sustainability. Partially,banks’ financial sustainability has a relationship with BI rate and money supply.