Interest Rates, Inflation, and Third-Party Funds: Evidence from Bank Rakyat Indonesia (2015–2019)

Abstract

This study examines the effect of interest rates and inflation on third-party funds (TPF) at PT Bank Rakyat Indonesia (Persero) Tbk (BRI) during 2015–2019. The study uses a quantitative associative design and secondary annual data compiled from BRI financial reports and official macroeconomic publications. The observation period contains 20 observations as represented in the dataset used for the regression analysis. Interest rates and inflation are specified as independent variables, while TPF consisting of demand deposits, savings, and time deposits is the dependent variable. Multiple linear regression was employed using SPSS after testing normality, multicollinearity, heteroscedasticity, and autocorrelation. The results indicate that interest rates significantly affect TPF (B = −4.381E−5; t = −2.757; p = .013), with a negative coefficient. Inflation also has a statistically significant relationship with TPF (B = 0.001; p = .010), although the reported regression output contains a sign inconsistency between the positive coefficient and the reported negative t-statistic that should be rechecked against the original SPSS output before publication. The simultaneous test is significant (F = 4.482; p = .027). The coefficient of determination is R² = .345, indicating that interest rates and inflation jointly explain 34.5% of the variation in TPF, while 65.5% is associated with factors outside the model. The findings suggest that macroeconomic conditions should be incorporated into bank funding strategy, pricing decisions, liquidity planning, and depositor-retention policies. The study contributes bank-specific evidence from BRI and highlights the need to interpret deposit responses to macroeconomic conditions within the institutional context of a large Indonesian bank.