In both developing and developed countries, Inflation is one of the important
variables that affect the economy of a country.. Indonesia has been observing various
economic crises that cause high inflation rate. One of them was on the 1997-1998
economic crisis that caused massive layoffs, the exchange rate of domestic currency
experienced a very sharp depreciation of foreign currency. To overcome the crisis
various ways to do, one of them is by raising the deposit rate to keep the domestic
currency does not continue to depreciate. This study was conducted to analyze the
determinants of the inflation rate by using a simple regression approach. The variables
used are inflation, money supply, exchange rate, and interest rate. Research conducted in
the period 1980-2015.
The results in this study indicate that the exchange rate variable (D) has a
positive and significant effect on the inflation rate. Money supply variable (JUB) has a
positive and significant effect on inflation rate. In addition, the interest rate variable (I)
has a positive and significant effect on inflation. The results in this study can be
concluded that the independent exchange rate, money supply, and interest rates variable
have a positive and significant relationship to inflation
