Proceedings of the International Conference on Engineering, Technology and Social Science (ICONETOS 2020)

An Analysis of Cashless Society for Monetary Policy in Perspective of Islam

Authors
Sasmita Nurvinda Laili, Siswanto
Corresponding Author
Sasmita Nurvinda Laili
Available Online 22 April 2021.
DOI
10.2991/assehr.k.210421.106How to use a DOI?
Keywords
Cashless Society, Interest Rate, Inflation, Islamic Monetary
Abstract

The increasing use of non-cash financial instrument (cashless society) is observable from the increase of money supply. Previous researches found a positive relationship between the total of money supply and inflation. In its effort of stabilizing price and inflation, Bank Indonesia uses interest rate transmission mechanism of monetary policy. Interest rate was selected because it concerns more about price in financial market for real market economic activities. In addition, any increase in money supply can enhance economic growth. The objectives of this study are to analyze the relationship between cashless society and inflation through interest rate transmission mechanism of monetary policy and to analyze economic growth in from the perspective of Islam. The instruments of cashless society used in this study are Bank Indonesia’s Real Time Gross Settlement value, Bank Indonesia’s National Clearing System value, and card payment growth. Interest rate transmission mechanism of monetary policy uses the yields of Bank Indonesia Certificates Sharia, Islamic Interbank Money Market, Third Party Funds, financing, consumption, and GDP to measure economic growth. Using VECM, this study finds that cashless society does not directly affect inflation. However, it can affect interest rate transmission mechanism of monetary policy and GDP. In Islam, the use of non-cash money is regulated similarly to the use of cash money, and sharia principles have been used in the monetary policy.

Copyright
© 2021, 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 International Conference on Engineering, Technology and Social Science (ICONETOS 2020)
Series
Advances in Social Science, Education and Humanities Research
Publication Date
22 April 2021
ISBN
10.2991/assehr.k.210421.106
ISSN
2352-5398
DOI
10.2991/assehr.k.210421.106How to use a DOI?
Copyright
© 2021, 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  - Sasmita Nurvinda Laili
AU  - Siswanto
PY  - 2021
DA  - 2021/04/22
TI  - An Analysis of Cashless Society for Monetary Policy in Perspective of Islam
BT  - Proceedings of the International Conference on Engineering, Technology and Social Science (ICONETOS 2020)
PB  - Atlantis Press
SP  - 736
EP  - 743
SN  - 2352-5398
UR  - https://doi.org/10.2991/assehr.k.210421.106
DO  - 10.2991/assehr.k.210421.106
ID  - Laili2021
ER  -