THE EFFECT OF INTEREST RATES, INFLATION, AND EXCHANGE RATES ON STOCK PRICES

Abstract

Stock price fluctuations influenced by macroeconomic dynamics are an important factor that investors and policymakers consider in the capital market. This study examines how inflation, interest rates, and currency exchange rates influence stock prices in Indonesian. The method used is a Systematic Literature Review (SLR), which reviews nine Sinta-indexed articles from 2019 to 2025 that discuss the connection between macroeconomic variables and stock prices. Research indicates that inflation and interest rates usually do not significantly influence stock prices, whereas the currency's exchange rate has a notable negative effect. A decline in the rupiah's exchange rate generally leads to lower stock prices because of higher import expenses and reduced investment risks. These findings bolster the theories of the Fisher Effect, Interest Rate Effect, and Purchasing Power Parity (PPP), which outline how monetary policy influences the stock market movements. This research will help investors and policymakers formulate more accurate economic strategies and investment decisions