Analysis of the Effectiveness of the Interest Rate Channel Monetary Policy Transmission Mechanism for Non-Performing Loans of Conventional Commercial Banks in Indonesia 2018 – 2022
Year: 2024
Type: article
Abstract: Interest rate channel monetary policy is dominant in Indonesia because interest rates act as an instrument in the banking sector that regulates the quantity of money in society and can respond directly to changes in monetary policy.Interest rate channel monetary policy can be used to control fluctuating non-performing loans. The aim of this research is to analyze the influence of interest rate channel monetary policy in the long term and short term on non-performing loans (NPL) of conventional commercial banks in Indonesia. This research uses the Error Correction Model (ECM) analysis tool. The research results show that the reference interest rate (BI Rate) has a significant short-term effect on non-performing loans. Deposit interest rates (rDEPO) and interbank money market interest rates (rPUAB) have a long-term influence on non-performing loans. Credit interest rates (rKRDT) have a significant long-term and short-term effect on non-performing loans. Meanwhile, the Bank Indonesia Certificate (rSBI) interest rate does not have a significant long-term or short-term effect on non-performing loans of conventional commercial banks in Indonesia.
Authors: Yustika Arga Puspita, Karsinah Karsinah
Institution: State University of Semarang
Language: English
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4407830917