Proceedings of the 4th International Conference on Islamic Economics, Business, Philanthropy, and PhD Colloqium (ICIEBP 2022)

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Analysis of Islamic Monetary Instruments and Islamic Bank Financing on Monetary Stability in Indonesia

Authors
Lavlimatria Esya1, *, Deden Misbahudin Muayyad1
1Fakultas Ekonomi dan Bisnis, Universitas Trisakti, West Jakarta, Indonesia
*Corresponding author. Email: lavlimatria.esya@trisakti.ac.id
Corresponding Author
Lavlimatria Esya
Available Online 19 June 2023.
DOI
10.2991/978-94-6463-176-0_4How to use a DOI?
Keywords
Bank Indonesia Sharia Certificates; Sharia Interbank Money Market; State Sharia Securities; Financing; Vector Error Correction Model (VECM)
Abstract

This study aims to analyze the effect of Islamic monetary instruments and financing on monetary stability in Indonesia. This study uses the Vector Error Correction Model (VECM), Granger Causality Test, Impulse Response Function (IRF), and Forecast Error Variance Decomposition (FEVD) by first conducting a stationarity test, cointegration test, optimum lag test. The data used in this study is monthly secondary data from the variable amount of money in circulation (M2), Bank Indonesia Sharia Certificates (SBIS), Sharia Interbank Money Market (PUAS), State Sharia Securities (SBSN), and Islamic Banking Financing for the period January 2011.1 to December 2021.12. The results of the VECM Model research show that in the long term the instrument variables of SBIS, PUAS, and SBSN have a significant and positive effect on the Money Supply (M2). Meanwhile, Financing (FIN) has no significant effect on Money Supply. In the short term, only PUAS instruments are significant. The implication is that the monetary authority in setting policies must pay attention to its impact on yields of sharia monetary instruments because if the yield is increased it will certainly increase the amount circulating in the community, which in turn will affect monetary stability.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 4th International Conference on Islamic Economics, Business, Philanthropy, and PhD Colloqium (ICIEBP 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
19 June 2023
ISBN
978-94-6463-176-0
ISSN
2352-5428
DOI
10.2991/978-94-6463-176-0_4How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Lavlimatria Esya
AU  - Deden Misbahudin Muayyad
PY  - 2023
DA  - 2023/06/19
TI  - Analysis of Islamic Monetary Instruments and Islamic Bank Financing on Monetary Stability in Indonesia
BT  - Proceedings of the 4th International Conference on Islamic Economics, Business, Philanthropy, and PhD Colloqium (ICIEBP 2022)
PB  - Atlantis Press
SP  - 43
EP  - 53
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-176-0_4
DO  - 10.2991/978-94-6463-176-0_4
ID  - Esya2023
ER  -