Analysis of the Effects of Macroeconomic Variables on Non-Performing Credit Risk in Emerging Market Asia 2010-2018

Karina Puspa Dewi, Rudi Purwono

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The purpose of this study is to determine and analyze
the influence of macroeconomic variables on the risk of
non-performing loans with case studies in Emerging
Markets Asia in the period 2010 to 2018. The risk of
non-performing loans representing banking stability is
measured using Non-Performing Loans (NPLs).
Meanwhile, macroeconomic variables that represent
economic stability consist of Gross Domestic Product
(GDP), Exchange Rates, Loan Interest Rates, Inflation,
and Domestic Credit to Private Sector. Data obtained
online through the World Development Indicator
Database is then estimated using dynamic panel
regression or Generalized Method Of Moment (GMM).
The results of this study indicate that the variable GDP,
Exchange Rate, and Inflation negatively affect NPL.
Meanwhile, variable interest rates on loans and the
Domestic Credit to the Private Sector have a positive
effect on NPLs

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