Document Type
Article
Abstract
This paper analyzes the macroprudential policy by the central bank to maintain the financial system stability. Using panel data of the government banks, foreign, private, joint venture, and regional development banks during 2004- 2012, we employ Vector Autoregressive Exogenous (VARX) and event analysis method and find that the level of exchange rate volatility decrease after the implementation of the one month holding period, six-month holding period and net open position policies. However, for the nominal exchange rate, these policies are not effective. In aggregate the reserve requirement plus loan to deposit ratio policy is effective to raise the bank credit allocation. Furthermore, the impact of the primary reserve policy is very limited to lower the liquidity of the economy; while at the same time the flow of foreign capital comes into very heavy
Recommended Citation
Purnawan, Muhammad Edhie and Nasir, M. Abd.
(2015)
"THE ROLE OF MACROPRUDENTIAL POLICY TO MANAGE EXCHANGE RATE VOLATILITY, EXCESS BANKING LIQUIDITY, AND CREDITS,"
Bulletin of Monetary Economics and Banking: Vol. 18:
No.
1, Article 4.
DOI: https://doi.org/10.21098/bemp.v18i1.511
Available at:
https://bulletin.bmeb-bi.org/bmeb/vol18/iss1/4
First Page
21
Last Page
44
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Country
Indonesia
Affiliation
Gadjah Mada University
