Proceedings of the 6th Annual International Conference on Management Research (AICMaR 2019)

Does Inflation Respond to Interest Rates Changes?

Authors
Rama Chandra, Sumitro Sumitro
Corresponding Author
Rama Chandra
Available Online 6 April 2020.
DOI
https://doi.org/10.2991/aebmr.k.200331.034How to use a DOI?
Keywords
inflation, interest rates, Granger Causality Test, vector auto regression
Abstract

This study aims to analyse the response of inflation to changes in interest rates in Indonesia, thus analysing the inter-relations between the two variables. The analysis uses the Granger Causality Test and Impulse Response Function approach to monthly time series data for the period January 2014 to June 2018, which includes Consumer Price Index, SBI Interest Rates, Interbank Money Market Interest Rates and Deposit Interest Rates. There is one-direction causality between the SBSBI and CPI. The government responded to the inflation rate by making SBSI adjustments this indicates the operation of monetary policy. The impact of changes in the inflation rate to SBSI lasted for six months. SBSI Adjustments are transmitted on the money market through deposits and credit. Changes in deposit and credit interest rates were responded to by inflation.

Copyright
© 2020, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the 6th Annual International Conference on Management Research (AICMaR 2019)
Series
Advances in Economics, Business and Management Research
Publication Date
6 April 2020
ISBN
978-94-6252-948-9
ISSN
2352-5428
DOI
https://doi.org/10.2991/aebmr.k.200331.034How to use a DOI?
Copyright
© 2020, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - Rama Chandra
AU  - Sumitro Sumitro
PY  - 2020
DA  - 2020/04/06
TI  - Does Inflation Respond to Interest Rates Changes?
BT  - Proceedings of the 6th Annual International Conference on Management Research (AICMaR 2019)
PB  - Atlantis Press
SP  - 156
EP  - 159
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200331.034
DO  - https://doi.org/10.2991/aebmr.k.200331.034
ID  - Chandra2020
ER  -