Analysis of The Impact of Macroeconomic Crises on Islamic Banking Financing Performance in Indonesia

Abstract

Islamic banking plays an important role in maintaining national financial stability through its intermediation function based on Sharia principles. Although Islamic banks are theoretically considered more resilient to economic shocks due to their profit-and-loss sharing mechanism and close linkage to the real sector, in practice they operate within the same macroeconomic environment as conventional banks and are therefore exposed to macroeconomic crises. This study aims to analyze the impact of macroeconomic conditions, represented by inflation, the BI Rate, and exchange rates, on Islamic banking financing in Indonesia. This research employs a quantitative approach using monthly time- series secondary data from January 2023 to December 2025, obtained from the Financial Services Authority (OJK), Bank Indonesia, and CEIC Data. The data are analyzed using multiple linear regression with the Ordinary Least Squares (OLS) method to examine the relationship between macroeconomic variables and Islamic bank financing. The results show that inflation, the BI Rate, and exchange rates have a positive and statistically significant effect on Islamic banking financing on a partial basis. Simultaneously, these macroeconomic variables also have a significant influence on Islamic bank financing. The high coefficient of determination indicates that variations in Islamic banking financing are largely explained by macroeconomic conditions during the study period. The findings suggest that rising inflation increases demand for real- sector financing, the BI Rate affects Islamic bank financing through indirect monetary transmission mechanisms, and exchange rate fluctuations raise financing needs due to changes in production and trade costs. The originality of this study lies in its simultaneous and comprehensive analysis of macroeconomic variables on Islamic banking financing in the post-global economic turbulence period.