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Financial Reform and Monetary Control in Indonesia
Author:
International Monetary Fund
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Series:
IMF Working Papers
Volume/Issue:
Volume 1988: Issue 004
Language:
English
Publication Date:
01 Jan 1988
DOI:
https://doi.org/10.5089/9781451930023.001
ISBN:
9781451930023
ISSN:
1018-5941
Pages:
36
Keywords:
WP; rate; money market; state bank; bank; excess reserves; time deposit; rate structure; commercial paper; SBPU rate; bank liquidity; interest rate targeting; Money markets; Monetary base; Exchange rates; Credit; Open market operations; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper analyzes the evolution and effectiveness of Indonesia’s monetary control system following the financial reforms implemented since 1983. These reforms entailed the abolition of interest rate and credit ceilings, a change in the central bank’s funding role, the introduction of new instruments of indirect monetary control, and measures to develop money markets. The new monetary control system was conducive to a more integrated and more competitive financial system and helped achieve the external balance objective. However, the pace of liberalization of money market rates was constrained by the choice of policy mix to deal with economic shocks.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 1988: Issue 004