Analysis Of Money Supply Dynamics And Influencing Factors In Indonesia
Abstract
This study analyzes the dynamics of money supply in Indonesia and the factors influencing
it. Using secondary data from Bank Indonesia, the Central Statistics Agency, and other official sources, the research focuses on the relationship between interest rates, exchange rates, inflation, and the money supply (M2). Descriptive analysis reveals that M2 has shown significant growth in recent years, driven by increased domestic economic activity. Multiple linear regression analysis indicates that interest rates have a significant negative impact on the money supply, while exchange rates and inflation demonstrate significant positive effects. The study evaluates the role of monetary policies announced by Bank Indonesia as signals to the market. Policies such as adjustments to benchmark interest rates and foreign exchange market interventions significantly influence the dynamics of money supply. With an R² value of 0.78, the research model explains a substantial portion of the variations in the money supply. This study underscores the importance of transparent
monetary policies in reducing information asymmetry and market uncertainty. The findings are expected to serve as a reference for policymakers in formulating economic strategies to maintain price stability, manage inflation, and support sustainable economic growth.
Keywords: Money Supply, Interest Rates, Exchange Rates, Inflation, Monetary Policy, Bank
Indonesia, Economic Stability, Information Asymmetry
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HUMANIS (Humanities, Management and Science Proceedings) is a national peer reviewed and open access journal that publishes significant and important research from all area of agroindustry.
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