About | Contact Us | Register | Login
ProceedingsSeriesJournalsSearchEAI
Proceedings of the 1st UHAMKA International Conference on Economics and Business, UHICEB 2023, 18-19 December 2023, Jakarta, Indonesia

Research Article

Transmission of Monetary Policy to Bank Lending Rate in Indonesia

Download110 downloads
Cite
BibTeX Plain Text
  • @INPROCEEDINGS{10.4108/eai.18-12-2023.2349310,
        author={Farrah  Noor Fitria Agus and Buddi  Wibowo},
        title={Transmission of Monetary Policy to Bank Lending Rate in Indonesia},
        proceedings={Proceedings of the 1st UHAMKA International Conference on Economics and Business, UHICEB 2023, 18-19 December 2023, Jakarta, Indonesia},
        publisher={EAI},
        proceedings_a={UHICEB},
        year={2024},
        month={12},
        keywords={policy rate lending rate incomplete pass-through adjustment},
        doi={10.4108/eai.18-12-2023.2349310}
    }
    
  • Farrah Noor Fitria Agus
    Buddi Wibowo
    Year: 2024
    Transmission of Monetary Policy to Bank Lending Rate in Indonesia
    UHICEB
    EAI
    DOI: 10.4108/eai.18-12-2023.2349310
Farrah Noor Fitria Agus1,*, Buddi Wibowo1
  • 1: University of Indonesia, Depok, Indonesia
*Contact email: farrah.noor@ui.ac.id

Abstract

This study aims to find out how quickly Indonesian lending rates react to shifts in policy interest rates. The level of transmission is estimated using VECM, while the time-varying speed of adjustment is estimated using MAL. The findings show the same incomplete pass-through for working capital loans and investment rates in long-term and short-term. Working capital and investment rates takes quite a slow time in responding to policy interest rates change. This study tests empirically the existence of asymmetrical behavior of lending interest rate adjustment in Indonesia. These findings are important for policymakers to know how long the credit rate response to monetary policy is.

Keywords
policy rate lending rate incomplete pass-through adjustment
Published
2024-12-13
Publisher
EAI
http://dx.doi.org/10.4108/eai.18-12-2023.2349310
Copyright © 2023–2025 EAI
EBSCOProQuestDBLPDOAJPortico
EAI Logo

About EAI

  • Who We Are
  • Leadership
  • Research Areas
  • Partners
  • Media Center

Community

  • Membership
  • Conference
  • Recognition
  • Sponsor Us

Publish with EAI

  • Publishing
  • Journals
  • Proceedings
  • Books
  • EUDL