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Abstract:
This study aims to analyze the impact of selected macroeconomics variables on Islamicbanks' profitability in Indonesia which is proxied by Return on Assets (ROA). The selected variables of macroeconomic include inflation, Bank Indonesia,s(BI) rate (central bank's rate), money supply, and exchange rate. This research used secondary monthly data from 2012-2015, and analyzed using multiple regression model. The research findings indicate that among four independent variables, there are three variables that significantly influence the performance of Islamic banks, namely BI's rate, exchange rate, and money supply. BI's rate and money supply have negative relationship with the performance of Islamic banks, while exchange rate show positive relationship with the performance of Islamic banking, Unfortunately, inflation does not significantly affect the performance of Islamic bank.
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