PENGARUH INDEKS HARGA KONSUMEN(IHK) DAN INFLASI TERHADAP SUKU BUNGA (BI RATE)

Abstract

Inflation occurs because a society wants to live beyond its economic capacity. The process of inflation, according to Keynesian is nothing but the process of seizing the share of sustenance among social groups who want a greater share than what the community can provide. This struggle process finally translates into a situation where the people's demand for goods always exceeds the amount of available goods (inflationary gap).The Consumer Price Index (CPI) can be interpreted as the price index of the cost of a set of consumer goods, each of which is weighted according to the proportion of public expenditure for the commodity concerned. The CPI measures the price of a certain set of goods (such as staple foods, clothing, housing, and various goods and services) that consumers buy.Interest rates is the value, level, price or profit given to investors from the use of investment funds on the basis of calculating economic value in a certain period of time. The magnitude of the bank's interest rate is used to control the economy of a country, regulated and stipulated by the government with the aim of maintaining the economic viability of a country. This interest rate is important to be taken into account because generally investors always expect a more profitable investment return. The interest rate determination is carried out by Bank Indonesia in accordance with Law number 23 of 1999 concerning Bank Indonesia. Interest rates with a 1-month tenor announced by Bank Indonesia periodically for a certain period that serves as a signal of monetary policy.This research was conducted for 6 months, from October 2017 to April 2018 .The results of the CPI research are one that greatly determines the occurrence of inflation. While the BI Rate is a monetary instrument that is able to control inflation volatility.

Key Words : Inflation, CPI, BI Rate.