Effectiveness and Forecasting of Interest Rate Reversal BI 7-Day Repo Rate in Indonesia: Lower Bound on Monetary Policy?

Sanica, I Gede; Nurcita, I Ketut; Mastra, I Made; Sukarnasih, Desak Made

doi:10.2478/mjss-2018-0016

Cited by 3 publications

(3 citation statements)

References 7 publications

(6 reference statements)

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“…This is aimed at making interest rates through BI7DRR expected to quickly affect the money market, banking and real sector. BI7DRR does not affect BI's monetary policy in determining the lower limit of the corridor (DF rate) and the upper limit of the corridor (LF rate) each at 75 bps below or above BI7DRR (Sanica et al, 2018).…”

Section: Descriptive Statistical Analysismentioning

confidence: 97%

Effect of Certificate of Bank Indonesia Sharia and Indonesian Bank Seven Days Repository Rate to Inflation Ratio in Indonesia During Covid-19 Pandemic

Rahman

Ratnasari²,

Wardhana³

2022

E3J

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Inflation that is too low can disrupt economic stability. The new benchmark interest rate by BI, BI7DRR is expected to increase the effectiveness of monetary policy to achieve the inflation target set. Meanwhile, SBIS is one of BI's alternatives to regulate inflation in Indonesia. This study aims to observe the effect of SBIS and BI7DRR on inflation in Indonesia for the 2019-2020 period. the data were gathered from Bank Idonesia website using purposive sampling method. The independent variables in this study are BI7DRR and Indonesian bank of sharia certificate SBIS, while the dependent variable is inflation. This study used eroor correction model (ECM) to determine the effect of independent variables to dependent one. The data was monthly time series period started from January 2019 to December 2020. The results showed that there was a significant effect between the return value of the SBIS to Indonesia's inflation rate.

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Section: Descriptive Statistical Analysismentioning

confidence: 97%

Effect of Certificate of Bank Indonesia Sharia and Indonesian Bank Seven Days Repository Rate to Inflation Ratio in Indonesia During Covid-19 Pandemic

Rahman

Ratnasari²,

Wardhana³

2022

E3J

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“…BI Rate is a financial policy determined by BI every month preceded by a meeting of the members of the board of governors by looking at the condition of the economy at home and abroad as a whole. The main factor in determining the BI Rate is inflation (Sanica et al, 2018). Prices of goods and services will rise or fall in general and continuously due to rising and falling inflation.…”

Section: Bank Indonesia (Bi) Ratementioning

confidence: 99%

How Do Inflation Rate, BI Rate, and Balance of Trade Directly Affect IDR to USD Exchange Rate and Indirectly Affect IDX Composite Index in Initial Stage of Covid-19 Outbreak?

Winarko

Wahono²,

Yuniningsih³

et al. 2021

RWE

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This study is trying to fill the research gap by understanding how several important financial variables interplay and affect the macroeconomic indicators, especially in developing country like Indonesia during the financial crisis period caused by the unexpected and sudden Covid-19 pandemic outbreak. The purpose of this research is to determine the direct effect of the inflation rate, Bank Indonesia (BI) rate, and Balance of Trade on the movement of Indonesia Rupiah (IDR) currency stability against US Dollar (USD) and indirect impact to the Indonesia Stock Exchange (IDX) Composite index in Indonesia during the initial stage of the pandemic outbreak. To achieve the research objectives, this study uses the Rupiah exchange rate against USD and IDX Composite index as the dependent variables, while the Inflation rate (CPI), BI rate, and Balance of Trade as the independent variables. The quantitative methodology is used in this research by applying linear and multiple simple regression techniques. The results of this research show that the Inflation rate, BI rate, and Balance of Trade were significantly affecting the Rupiah exchange rate against the USD, and it found that the most dominant variable in this model was the BI rate. The Inflation rate and Balance of Trade partially had no direct significant influence toward the movement of the Rupiah exchange rate against the USD during the critical anticipation period of Covid-19 pandemic outbreak. Furthermore, Rupiah exchange rate against the USD gave a significant influence toward the IDX Composite index.

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“…In the current era of economic development, Bank Indonesia issued a new policy related to the benchmark interest rate or commonly referred to as the new BI 7-Day Repo Rate policy rate (Sanica et al, 2018). In addition to the existing BI Rate in Indonesia, the BI 7-Day Repo Rate is expected to affect the money market, banking and real sectors because it has a transactional nature or can be traded on the market, has a strong relationship with money market interest rates, and is expected to drive financial markets (Kismawati et al, 2019).…”

Section: Introductionmentioning

confidence: 99%

Effect of Financial Performance on Stock Price with Return on Assets as an Intervening Variable in State-Owned Banks in Indonesia

Kusumaningrum

Iramani

2020

IJMMU

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The objective of this study is to examine the significant effect of financial performance on stock price with Return on Assets (ROA) as an intervening variable in state-owned banks. This is an explanatory research. The research population is Indonesian banking industry owned by the government, namely the State-Owned Commercial Bank (SOE). The 4 (four) banks involved as the sample among other PT Bank Mandiri (Persero) Tbk, PT Bank Negara Indonesia (Persero) Tbk, PT Bank Rakyat Indonesia (Persero) Tbk, and PT Bank Tabungan Negara (Persero) Tbk. The test results showed that Non-Performing Loan (NPL) ratio does not have a significant negative effect on Return on Assets (ROA), Loan to Deposit Ratio (LDR) ratio does not have a significant positive effect on Return on Assets (ROA), Capital Adequacy Ratio (CAR) ratio does not have a significant positive effect on Return on Assets (ROA), Operating Expenses toward Operating Income (OEOI) has a significant negative effect on Return on Assets (ROA), BI Rate has a significant positive effect on Return on Assets (ROA), Return on Assets (ROA) has a significant positive effect on the return of stock price.

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Effectiveness and Forecasting of Interest Rate Reversal BI 7-Day Repo Rate in Indonesia: Lower Bound on Monetary Policy?

Cited by 3 publications

References 7 publications

Effect of Certificate of Bank Indonesia Sharia and Indonesian Bank Seven Days Repository Rate to Inflation Ratio in Indonesia During Covid-19 Pandemic

Effect of Certificate of Bank Indonesia Sharia and Indonesian Bank Seven Days Repository Rate to Inflation Ratio in Indonesia During Covid-19 Pandemic

How Do Inflation Rate, BI Rate, and Balance of Trade Directly Affect IDR to USD Exchange Rate and Indirectly Affect IDX Composite Index in Initial Stage of Covid-19 Outbreak?

Effect of Financial Performance on Stock Price with Return on Assets as an Intervening Variable in State-Owned Banks in Indonesia

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