Rabu, 30 Mei 2012
Monetary Policy
MONETARY
POLICY
In a system of free exchange rate and perfect capital mobility, monetary policy is more effective than fiscal policy in an effort to achieve balance and monetary stability economics. The policy larger role in stimulating the recovery of effective monetary economics. The policy promising achievement of low inflation, stable exchange rate and interest.
One of the effects of capitalism that is out of control fluctuates with no standard reference. The concept of money that was originally used as:
medium of exchange or payment media
means for storing the value
tool unit of account
also used as a means of speculation.
When money is traded on the foreign exchange market will continue to fluctuate in value following the market price (supply and demand). Based on reality, the real rate of exchange with fiat money, where money is made trading commodities extremely detrimental to the individual and society. For example, Indonesia's foreign debt amounts originally U.S. $ 102 billion in just over a year rose five-fold to U.S. $ 510 billion, as a result of funds that should be used for the welfare of the people living in accordance with the mandate of the 1945 Constitution, most aspirated to pay interest and the loan principal. To close the budget deficit the government again had to rely on debt as a funding source.
Economists agreed the characteristics of a country that is vulnerable to financial crisis if the country:
have the amount of foreign debt is large enough
Uncontrolled inflation
large balance of payments deficit
Currency exchange rates are not balanced
interest rates on equity
If the above characteristics are owned by a state, then certainly the State is only a matter of time of economic crisis.
What Economists Islam about the crisis
Listened interesting is the opinion of Islamic economists about the causes of the crisis. Crisis occurs because of imbalance between the monetary sector to the real sector. In the case of Islamic economics is called usury. Monetary sector (finance) grew much faster to leave the real sector (goods and services). In harmony with the principles of capitalist economy to be the center of the world economy after the collapse of socialist thought that was carried by the Soviets did not connect at all between the real sector with the monetary sector. Both stood separately.
The rapid growth of the monetary sector is outpacing growth in the real sector can be observed in the movement of transactions in the stock market and foreign exchange markets are filled with the practice of usury and speculation. Peter Ducker (1980), a management expert said that the symptoms of imbalance between the rate of growth of the monetary sector with a growth rate of real sector (goods and services) is caused by the decoupling between the monetary sector with the real sector. The existence of this imbalance, of course, be a serious threat to the world economy. The speculators in the stock market and foreign exchange markets would easily buy or take off their assets without regard to the stability of the currency of a country. If the panic, the original value of the currency will balance freefall as speculators took off all his assets to the market and move investments to other markets that provide benefits. The amount of money circulating in the market without a significant offset movement of the trade / services resulting in value for money to be dropped so that the prices to rise. Situations like this led to the growth of uncontrolled inflation.
To ensure the stability of the monetary sector and real sector, the role of government in this case the Central Bank is very much needed.
Bank Indonesia has the objective to achieve and maintain rupiah stability. To achieve these objectives, the central bank monetary policy instruments needed to influence money supply, among others:
Required reserves (reserve requirement)
Open Market Operations With Repurchase Agreement (Open market repurchase agreements)
Discount Interest Rate.
To create a balance between the monetary sector to the real sector policies that can be taken are:
Strictly controlling or limiting the amount of money circulating in the community.
Accelerate the velocity of money circulating in the community. To accelerate the velocity of money the government must remove the system of interest / usury banking system of the body. If the system was abolished interest of the real sector will be encouraged by the existing fund is fully invested in the real sector for a profit.
In a system of free exchange rate and perfect capital mobility, monetary policy is more effective than fiscal policy in an effort to achieve balance and monetary stability economics. The policy larger role in stimulating the recovery of effective monetary economics. The policy promising achievement of low inflation, stable exchange rate and interest.
One of the effects of capitalism that is out of control fluctuates with no standard reference. The concept of money that was originally used as:
medium of exchange or payment media
means for storing the value
tool unit of account
also used as a means of speculation.
When money is traded on the foreign exchange market will continue to fluctuate in value following the market price (supply and demand). Based on reality, the real rate of exchange with fiat money, where money is made trading commodities extremely detrimental to the individual and society. For example, Indonesia's foreign debt amounts originally U.S. $ 102 billion in just over a year rose five-fold to U.S. $ 510 billion, as a result of funds that should be used for the welfare of the people living in accordance with the mandate of the 1945 Constitution, most aspirated to pay interest and the loan principal. To close the budget deficit the government again had to rely on debt as a funding source.
Economists agreed the characteristics of a country that is vulnerable to financial crisis if the country:
have the amount of foreign debt is large enough
Uncontrolled inflation
large balance of payments deficit
Currency exchange rates are not balanced
interest rates on equity
If the above characteristics are owned by a state, then certainly the State is only a matter of time of economic crisis.
What Economists Islam about the crisis
Listened interesting is the opinion of Islamic economists about the causes of the crisis. Crisis occurs because of imbalance between the monetary sector to the real sector. In the case of Islamic economics is called usury. Monetary sector (finance) grew much faster to leave the real sector (goods and services). In harmony with the principles of capitalist economy to be the center of the world economy after the collapse of socialist thought that was carried by the Soviets did not connect at all between the real sector with the monetary sector. Both stood separately.
The rapid growth of the monetary sector is outpacing growth in the real sector can be observed in the movement of transactions in the stock market and foreign exchange markets are filled with the practice of usury and speculation. Peter Ducker (1980), a management expert said that the symptoms of imbalance between the rate of growth of the monetary sector with a growth rate of real sector (goods and services) is caused by the decoupling between the monetary sector with the real sector. The existence of this imbalance, of course, be a serious threat to the world economy. The speculators in the stock market and foreign exchange markets would easily buy or take off their assets without regard to the stability of the currency of a country. If the panic, the original value of the currency will balance freefall as speculators took off all his assets to the market and move investments to other markets that provide benefits. The amount of money circulating in the market without a significant offset movement of the trade / services resulting in value for money to be dropped so that the prices to rise. Situations like this led to the growth of uncontrolled inflation.
To ensure the stability of the monetary sector and real sector, the role of government in this case the Central Bank is very much needed.
Bank Indonesia has the objective to achieve and maintain rupiah stability. To achieve these objectives, the central bank monetary policy instruments needed to influence money supply, among others:
Required reserves (reserve requirement)
Open Market Operations With Repurchase Agreement (Open market repurchase agreements)
Discount Interest Rate.
To create a balance between the monetary sector to the real sector policies that can be taken are:
Strictly controlling or limiting the amount of money circulating in the community.
Accelerate the velocity of money circulating in the community. To accelerate the velocity of money the government must remove the system of interest / usury banking system of the body. If the system was abolished interest of the real sector will be encouraged by the existing fund is fully invested in the real sector for a profit.
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