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Operationally, the monetary policy stance is reflected by setting the policy rate (BI Rate) which is expected to affect interest rates and money market deposit rates and lending rates. Changes in interest rates will ultimately affect output and inflation. http://gemmaaktuaria.com/?p=145 Implementation of the ITF in Indonesia following the basic principle that the ITF is a framework, not the rule. With this principle, monetary policy is not implemented rigidly. The implementation of monetary policy is also considering development goals, especially broader economic growth. In contrast to the principle of full discretionary, ITF requires that discretionary policy in the implementation of monetary policy is limited. With these basic principles, Bank Indonesia monetary policy with the principal elements: a. First, the interest rate (BI-rate) is used as an operational target for monetary replace the money supply. It is based on a consideration of the weakening of the relationship between the money supply to the rate of inflation. b. Second, monetary policy strategies are reinforced with pre-emptive or forward looking. These basic elements as well as a great challenge for Bank Indonesia considering inflation in Indonesia is more influenced by inflation expectations are adaptive. Monetary policy needs to be consistent to the final target will be achieved or avoid the time-inconsistency policy. Without strong consistency, future policy received less attention from the public. Society will again use adaptive expectations and / or provide relatively small portion of the policy measures that will be taken forward and perform optimization in decision-making. Indonesian Banking Architecture (API) is a basic framework of the Indonesian banking system that is comprehensive and also provide direction, shape, and structure of the banking industry for a period of five to ten years. The policy direction of the development of the banking industry in the future will come in the API and formulated based on the goal of achieving a
healthy banking system, strong and efficient in order to create a stable financial system in order to help promote national economic growth. With the need for national banks and the blue print as a continuation of the restructuring program which has been running since 1998, Bank Indonesia on January 9, 2004 has been launched as an overall framework API development policy towards Indonesia's banking industry in the future. The launch of the API is not apart from the efforts of the Government and Bank Indonesia to rebuild the economy of Indonesia through the publication of a white paper in accordance with the Government Decree No.. 5 of 2003, where the API to be one of the major programs in the white paper.
Criticism of the desire to have a more robust banking fundamentals and taking into account inputs obtained in implementing the API for the past two years, the Bank Indonesia feels the need to refine the program of events listed in the API. Completion of API activity programs are not apart from the developments happening on the national and international economy. Improvements to the API programs include strategies include more specific information about the development of Islamic banking, BPR, and SMEs in the future so that the API is expected to have a more comprehensive program of activities and a comprehensive banking system as a whole includes related commercial banks and rural banks, both conventional and Islamic, as well as the development of MSMEs.