The Monetary Policy in Indonesia: in the Perspective of Islamic Economics

Wisandani, Iwan; Iswati, Sri; Ismal, Rifki

doi:10.15575/ijni.v5i1.1443

Cited by 7 publications

(10 citation statements)

References 3 publications

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“…Asnuri (2013), Wisandani, et al (2017) concludes that today's monetary policy does not get along with the real sector. The economy (including in Indonesia) dominated by the virtual transaction.…”

Section: Resultsmentioning

confidence: 99%

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Islamic Monetary Policy and Its Impact on Real Sector

Octaviani

Arif

2018

trikonomika

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The essence of the Islamic economic system is strengthening the real sector. This research aims to analyze the effect of Islamic monetary instrument (such as SBIS, PUAS and Islamic bank financing in the real sector. This research uses the Vector Error Correction Model (VECM) as a method of analysis. The finding revealed that based on the VECM estimation test, in the long term SBIS and Islamic bank financing has a positive effect on the Industrial Production Index (IPI). Meanwhile, PUAS has an adverse effect toward Industrial Production Index (IPI). Besides, based on impulse response function (IRF) test, the shock of SBIS and PUAS responded positively by Industrial Production Index (IPI). Then based on the result of FEVD test, the variable of PUAS in the model of this research has the most significant contribution toward Industrial Production Index (IPI).

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Section: Resultsmentioning

confidence: 99%

“…The development in the real sector should drive an economy. The monetary sector should be able to support the growth in the real sector (Wisandani et al, 2017). Sugianto et al (2015) stated that in Islamic economics, the monetary sector must have a direct relationship to the real sector.…”

Section: Introductionmentioning

confidence: 99%

Islamic Monetary Policy and Its Impact on Real Sector

Octaviani

Arif

2018

trikonomika

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“…In addition, the researchers also conducted various deepening of the relationship between monetary policy and its instruments in influencing growth, both in conventional monetary policy on economic growth (Bhattacharya et al, 2009;Igharo et al, 2020;Khabo & Harmse, 2005;Mishchenko et al, 2018;Precious & Palesa, 2014;Twinoburyo & Odhiambo, 2018;Younsi & Nafla, 2019), Islamic monetary policy on economic growth (Bayuni & Srisusilawati, 2018;Octaviani & Al Arif, 2018;Wahid et al, 2020), as well as monetary policy in the dual banking system and its transmission mechanism for growth (Muhammad et al, 2017;Wisandani et al, 2017;Ascarya, 2012;Ascarya, 2014;Ayuniyyah et al, 2013;Muhammad et al, 2017;Rusydiana, 2009).…”

Section: Figure 1 World Economic Growthmentioning

confidence: 99%

Dynamic Model of The Impact of Macro Indicators and Islamic Monetary Policy Instruments on The Dual Banking System

Maisuroh

Adam

2022

iijse

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Indonesia is the largest Muslim country with a unique monetary system that in its development tries to juxtapose two monetary systems that have different philosophies and still need to be deepened on the extent of their impact and effectiveness on the economy. The study explores the impact of macro indicators and monetary policy instruments on economic output in Indonesia. Using the time series analysis method with the Vector Error Correction Model (VECM) approach, the model shows the results that the Macro Capital Market or Stock Market indicators have a positive impact on the economy both in the short and long term. At the same time, inflation responds positively to short-term behavior but becomes economic constraints in long-term action. Meanwhile, in the Monetary policy instruments’ scope, the M1 variable consistently has positive implications both in the short and long term. In contrast, the M2 and SBIS variables give negative responses in the short time but become a driving force for the economy in the long term. Meanwhile, there is no positive correlation between Sharia, Monetary Operations with Economic Output. The research suggests focusing on innovating sharia monetary policy instruments by continuing to carry out monetary policy reforms in order to stimulate better economic conditions.

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“…Monetary policy through Islamic instruments and facilities is expected to be more stable, as it is more closely tied to the real sector through profit-sharing agreements than to the financial sector. As a consequence, financial and economic stability can be created from Islamic instruments and facilities (Wisandani, Iswati, & Ismal, 2017).…”

Section: Background Theorymentioning

confidence: 99%

Islamic Bank and Monetary Policy: The Case of Indonesia

Ponziani

Mariyanti

2020

ijief

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Islamic banks in Indonesia exist side by side with their conventional counterparts within a dual banking system. The central bank aims to achieve price stability in the economy using both conventional and Islamic monetary instruments within this dual monetary system. This creates a unique environment for Islamic banks. This research aims to examine the role of Islamic banks in the monetary policy transmission mechanism using Granger Causality and Autoregressive Distributed Lag (ARDL). The balance sheet components of deposit and financing are hypothesized to function in the monetary transmission process within the bank financing channel. Granger causality reveals that the Islamic interbank overnight rate Granger causes Islamic deposits and financing, and that these in turn Granger cause the industrial production index. This index Granger causes inflation, Islamic deposits, and the Islamic interbank overnight rate. Islamic deposits and inflation then Granger cause the Islamic interbank overnight rate. The ARDL results show cointegrating relationships in the output and inflation model. Long-term convergence could be achieved to correct deviations in output and inflation by way of Islamic banks' deposits and financing. However, there is only a short-term influence of Islamic bank deposits on output. In the short-run, these deposits do not contribute to inflation. Islamic bank financing does not have a short-term relationship with output and inflation; therefore, there is declining effectiveness of Islamic banks' financing contribution to the economy.

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The Monetary Policy in Indonesia: in the Perspective of Islamic Economics

Cited by 7 publications

References 3 publications

Islamic Monetary Policy and Its Impact on Real Sector

Islamic Monetary Policy and Its Impact on Real Sector

Dynamic Model of The Impact of Macro Indicators and Islamic Monetary Policy Instruments on The Dual Banking System

Islamic Bank and Monetary Policy: The Case of Indonesia

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