Analyzing monetary policies and bank credit in Indonesia’s provincial clusters amidst Covid-19 pandemic
Bibliographic Data
| ID | 12549688 |
|---|---|
| Authors | Sugiharso Safuan (0000-0001-5267-4822, Universitas Indonesia, Indonesia, corresponding author), Eric Alexander Sugandi (0000-0002-2909-0711, Universitas Indonesia, Indonesia), Muzafar Shah Habibullah (0000-0002-2853-8019, Putra Business School, Malaysia), Gregory A James (0000-0002-2705-3909, Leicester Castle Business School, De Montfort University, United Kingdom) |
| Year | 2024 |
| Volume | 29 |
| Issue | 4 |
| Pages | 1785-1833 |
| Publication date | 2024-06-04 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of the Asia Pacific Economy (JOURNAL) |
| Journal identifiers | ISSN: 1354-7860 • E-ISSN: 1469-9648 |
| Publisher | Routledge (PUBLISHER • GB) |
| DOI | 10.1080/13547860.2024.2356338 |
| OpenAlex | W4399357531 |
| Language | EN |
| Citations received | 1 |
| References cited | 14 |
This research investigates the impact of monetary policy instruments employed by the Bank of Indonesia (BI), including reserve requirement (GWM), policy rate, and loan-to-value (LTV) ratio, on bank credit by sector in Indonesia. We utilize FMOLS and DOLS techniques to estimate the effects of policy instruments and COVID-19 variables on bank credit across six clusters of provinces. Our findings indicate that the GWM exhibits a negative impact, while the policy rate positively influences bank credit in all non-household sectors in Indonesia. The LTV instrument significantly affects bank credit in household sectors. Furthermore, The Covid-19 pandemic’s influence on the relationship between each policy instrument and bank credit varies across economic sectors and provincial clusters. We recommend BI to utilize the GWM and LTV instruments more frequently and exercise caution in reducing the policy rate to very low levels, as excessively low interest rates may not incentivize banks to increase lending
2019-20 coronavirus outbreak · Business · Coronavirus disease 2019 (COVID-19 · Development economics · Economics · Financial system · Monetary economics · Monetary policy · Pandemic · Severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2 · Banking stability, regulation, efficiency · Economic Growth and Fiscal Policies · Islamic Finance and Banking Studies · Medicine · Virology
| Unique citing works | 1 |
|---|---|
| Citations per year | 0.5 |
| Citation span | 2024 - 2024 (1) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 1 |