Covid-19 and The Effectiveness of Monetary Policy Quantitative Easing Indonesia
-
Dudi Duta Akbar
*
Universitas Bina Sarana Informatika, Jakarta,
Indonesia
(*) Corresponding Author
Abstract
The basis for this research is to examine the impact of the Covid-19 pandemic on Indonesian financial markets and the dynamics of monetary policy. Focus on monetary policy conducted by Bank Indonesia regarding Quantitative Easing . The study was conducted using balance sheet information from a sample of 38 private foreign exchange banks in Indonesia to then find out whether policies have an effect on " loan growth ", and how the response to bank loan growth is in responding to the crisis episode caused by the COVID-19 pandemic . The data is taken from the first quarter of 2019 to the second quarter of 2021. Using panel data, a cross section of thirty-eight banks and time series data . This research found. First, the securities of Bank Indonesia conducted Quantitative Easing at the beginning of the year, until September 2020 amounting to Rp. 666 trillion resulted in an increase in total banking assets. Second, the Covid-19 factor has become a significant negative factor for credit growth amid the QE policies that have been carried out by Bank Indonesia. Third, the total bank deposit has a negative correlation with the rate of credit growth but is not significant. Finally, the overall analysis of this research shows that QE (Quantitative Easing) has a small impact on loan growth ( loan growth ) even though it has included the bank health factor ( Bank Health ) which represents the trust factor in the banking system.
Downloads
References
Aldasoro, I., Fender, I., Hardy, B., & Tarashev, N. (2020). Effects of Covid-19 on the Banking Sector: the Market’s Assessment. BIS Bulletin, 12, 1–7.
Alessandro Rebucci, Jonathan S. Hartley, and D. J. (2022). An Event Study of COVID-19 Central Bank Quantitative Easing in Advanced and Emerging Economies. NBER Working Paper No. 27339, 1–45.
Ari, A., Chen, S., & Ratnovski, L. (2020). COVID-19 and Non-Performing Loans: Lessons from past Crises. SSRN Electronic Journal, 71, 1–7. https://doi.org/10.2139/ssrn.3632272
Bappenas RI. (2020). Perkembangan Ekonomi Indonesia dan Dunia untuk Triwulan I 2020. Bappenas RI, 4(1), 1–89. https://www.bappenas.go.id/files/4215/9236/1094/ND_269_Penyampaian_Laporan_Perkembangan_Ekonomi_Indonesia_dan_Dunia_untuk_Triwulan_I_Tahun_2020.pdf
Borio, C., & Zabai, A. (2018). Unconventional monetary policies: A re-appraisal. Research Handbook on Central Banking, 570, 398–444. https://doi.org/10.4337/9781784719227.00026
Bowman, D., Cai, F., Davies, S., & Kamin, S. (2015). Quantitative easing and bank lending: Evidence from Japan. Journal of International Money and Finance, 57(101), 15–30. https://doi.org/10.1016/j.jimonfin.2015.05.002
Dell’Ariccia, G., Rabanal, P., & Sandri, D. (2018). Unconventional monetary policies in the Euro Area, Japan, and the United Kingdom. Journal of Economic Perspectives, 32(4), 147–172. https://doi.org/10.1257/jep.32.4.147
Hosono, K. (2006). The transmission mechanism of monetary policy in Japan: Evidence from banks’ balance sheets. Journal of the Japanese and International Economies, 20(3), 380–405. https://doi.org/10.1016/j.jjie.2005.07.003
Kashyap and Stein. (2000). What Do a Million Observations on Banks Say about the Transmission of Monetary Policy. The American Economic Review, 1.
Kassa, W. (2020). COVID-19 and Trade in Africa: Impacts and Policy Response. SSRN Electronic Journal, 2020(1), 1–8. https://doi.org/10.2139/ssrn.3619230
Kopecky, K. J., & VanHoose, D. (2004). A model of the monetary sector with and without binding capital requirements. Journal of Banking and Finance, 28(3), 633–646. https://doi.org/10.1016/S0378-4266(03)00038-4
Montgomery, H., & Volz, U. (2019). The Effectiveness of Unconventional Monetary Policy in Japan. Journal of Economic Issues, 53(2), 411–416. https://doi.org/10.1080/00213624.2019.1594525
Perkins, D. W., Labonte, M., Gnanarajah, R., & Scott, A. P. (2020). COVID-19 and the Banking Industry: Risks and Policy Responses. Congressional Research Service, 1–26. https://www.hsdl.org/?abstract&did=840257
Shiratsuka, S. (2010a). Size and Composition of the Central Bank Balance Sheet: Revisiting Japan’s Experience of the Quantitative Easing Policy. Federal Reserve Bank of Dallas, Globalization and Monetary Policy Institute Working Papers, 2010(42). https://doi.org/10.24149/gwp42
Shiratsuka, S. (2010b). Size and Composition of the Central Bank Balance Sheet: Revisiting Japan’s Experience of the Quantitative Easing Policy. Federal Reserve Bank of Dallas, Globalization and Monetary Policy Institute Working Papers, 2010(42), 79–106. https://doi.org/10.24149/gwp42
Sugandi, E. A. (2021). Indonesia’s Financial Markets and Monetary Policy Dynamics Amid the COVID-19 Pandemic. Asia-Pacific Financial Markets, 1198. https://doi.org/10.1007/s10690-021-09354-4
Bila bermanfaat silahkan share artikel ini
Berikan Komentar Anda terhadap artikel Covid-19 and The Effectiveness of Monetary Policy Quantitative Easing Indonesia
Pages: 314-320
Copyright (c) 2022 Dudi Duta Akbar
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under Creative Commons Attribution 4.0 International License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (Refer to The Effect of Open Access).
