Indonesia Conference Directory

This study aims to analyze the effect of long-term and short-term macroeconomic variables on the shariah capital market using the Indonesian Islamic Stock Index (ISSI). This research is a quantitive study that applies a Vector Error Correction Model (VECM). The empirical findings show that the inflation rate had a negative effect with a 5% significance level, while the exchange rate had a negative effect with a significant level of 10%. The Industrial Production Index and gold prices had a positive effect at a 10% significance level while the gold price influence positively and significantly at 5% significance rate against ISSI. Investors should consider macroeconomic variables before investing in the shariah capital market.