THE EFFECT OF RUPIAH EXCHANGE RATE AND INFLATION RATE TOWARDS COMPOSITE STOCK PRICE INDEX IN INDONESIA STOCK EXCHANGE

This study aims to examine the relationship between the rupiah exchange rate and inflation rates on CSPI in Indonesia Stock Exchange. The data used are secondary data of Rupiah exchange rate toward US Dollar and inflation rate data obtained from Bank Indonesia publication through www.bi.go.id website and movement data of CSPI through website www.finance.yahoo.com. Determination of the sample based on monthly time series data period December 2011 - January 2014 by using the method of saturated samples, i.e. as many as 48 samples. The data obtained were analyzed by multiple linear regression approaches. There was a negative influence of inflation rate on CSPI for the period of December 2011 - January 2014 with the regression coefficient of 0.279; the negative value indicates that there is a negative correlation of inflation rate to CSPI. While the relationship between the Rupiah exchange rate To CSPI showed a positive relationship with the regression coefficient of 0.888.