A Study on the Dual Transmission Mechanism of Monetary Policy in Indonesia
Abstract
This paper aims to explore the dual transmission mechanism of monetary policy in Indonesia, focusing on how changes in policy instruments simultaneously affect the real and financial sectors. The dual transmission operates through two primary channels: the interest rate channel and the credit (financing) channel. In the Indonesian context, the effectiveness of this mechanism is shaped by the structure of the financial system, the degree of banking intermediation, and the institutional differences between conventional and Islamic banking. The study finds that the impact of monetary policy changes on inflation and economic growth is not always symmetric, as it depends on the strength of the interaction between money demand, interest rates, and credit distribution. By utilizing historical data and monetary policy records from Bank Indonesia, this study highlights how open market operations influence both liquidity and real economic indicators. Evidence suggests that post-COVID, Indonesia experienced notable improvements in price stability and GDP growth. When compared to countries like Turkey and Malaysia, Indonesia’s overall economic recovery has been strong, despite its lower GDP per capita. Furthermore, the findings underscore the growing role of Islamic financial instruments, which have shown potential to directly affect the real sector through money demand and supply mechanisms originating from Islamic banking.
References
Akbar, A., Nasution, I. A., Harahap, M. I., Harahap, R. H., & Tambunan, K. (2022). Transmission Mechanism Of Islamic Monetary Policy In Indonesia. CEMERLANG : Jurnal Manajemen Dan Ekonomi Bisnis, 2(2), 236–249.
Amrial, Mikail, A., & Arundina, T. (2019). Implementation of dual monetary policy and its relevance to inflation and unemployment in the Phillips curve context in Indonesia. International Journal of Islamic and Middle Eastern Finance and Management, 12(5), 680–697. https://doi.org/10.1108/IMEFM-11-2018-0398
Ascarya. (2012). Alur Transmisi Dan Efektifitas Kebijakan Moneter Ganda Di Indonesia. Buletin Ekonomi Moneter Dan Perbankan, 283–315.
Ascarya. (2014). Monetary Policy Transmission Mechanism Under Dual Financial System In Indonesia: Interest-Profit Channel. International Journal of Economics, Management and Accounting, 22(1), 1–32.
Audah, M. T., & Kasri, R. A. (2020). Does Islamic banking matter in transmitting monetary policy? empirical evidence from Indonesia and Malaysia. Pertanika Journal of Social Sciences and Humanities, 28(1), 679–694. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85082085264&partnerID=40&md5=b592fa84092b337789c911f821abf7f7
El, M., & Khatat, H. (2016). Monetary Policy in the Presence of Islamic Banking (72; 16).
Fikri, R. J. (2018). Monetary Transmission Mechanism Under Dual Financial System In Indonesia: Credit-Financing Channel. In Journal of Islamic Monetary Economics and Finance (Vol. 4, Issue 2). www.ojk.go.id,
Hafidh, A. A. (2021). Responses of Islamic banking variables to monetary policy shocks in Indonesia. Islamic Economic Studies, 28(2), 174–190. https://doi.org/10.1108/ies-11-2020-0049
Hasanah, M., Puji Astuti, R., Ambarwati, I., & Maryani. (2024). Kebijakan Moneter Di Indonesia. Gudang Jurnal Multidisiplin Ilmu, 2(5), 49–54. https://doi.org/10.59435/gjmi.v2i5.430
Juhro, S. M., & Goeltom, M. S. (2013). The Monetary Policy Regime in Indonesia (17).
Juhro, S. M., & Iyke, B. N. (2019). Monetary policy and financial conditions in Indonesia. Buletin Ekonomi Moneter Dan Perbankan, 21(3), 283–302. https://doi.org/10.21098/BEMP.V21I3.1005
Juhro, S. M., Syarifuddin, F., & Sakti, A. (2025). Inclusive Welfare: On The Role of social-public finance and monetary Economics (1st ed., Vol. 1). Springer.
Majid, M. S. A., & Hasin, Z. (2014). Islamic banks and monetary transmission mechanism in Malaysia. Journal of Economic Cooperation and Development, 35(2), 137–166. https://www.scopus.com/inward/record.uri?eid=2-s2.0-84901679038&partnerID=40&md5=145adaae14813b15107ea671c6727f12
Mishkin, F. S. (2011). The economics of money, banking and financial markets (Vol. 4). Pearson Canada.
Sari, P. K., & Fakhruddin. (2016). Identifikasi Penyebab Krisis Moneter Dan Kebijakan Bank Sentral Di Indonesia: Kasus Krisis Tahun (1997-1998 dan 2008). Jurnal Ilmiah Mahasiswa (JIM) Ekonomi Pembangunan Fakultas Ekonomi Dan Bisnis Unsyiah, 1(2), 377–388.
Shah, S. M. A. R., Helmi, M. H., Farooq, M. U., & Kabir, A. (2024). INTERBANK RATE AND MONETARY POLICY: INSIGHTS FROM DUAL BANKING SYSTEMS OF DEVELOPING COUNTRIES. ISRA International Journal of Islamic Finance, 16(2), 131–153. https://doi.org/10.55188/ijif.v16i2.553
Sriyono. (2013). Strategi Kebijakan Moneter Di Indonesia. JKMP (, 1(2), 111–236.
Syapriatma, I. (2017). Monetary Policy Transmission, Islamic Bank Financing Channel In Indonesia. Iqtishaduna, 8(2), 1–11.
Tang, M. M. J., Puah, C. H., & Gusti Ayu Purnamawati, I. (2020). Monetary policy transmission mechanisms in Indonesia: Revisiting the role of Divisia money. Economic Annals-XXI, 185(9–10), 91–98. https://doi.org/10.21003/EA.V185-09
Warjiyo, P. (2004). Mekanisme Transmisi Kebijakan Moneter Di Indonesia (11; Kebanksentralan)
Zulkhibri, M., & Sukmana, R. (2017). Financing Channels and Monetary Policy in a Dual Banking System: Evidence from Islamic Banks in Indonesia. Economic Notes, 46(1), 117–143. https://doi.org/10.1111/ecno.12076
Copyright (c) 2025 Arroyyan Ramly, Adem ESEN, Nurjanah Nurjanah

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
- Hak publikasi atas semua materi informasi yang tercantum dalam situs jurnal ini dipegang oleh dewan redaksi/editor dengan sepengetahuan penulis. Pengelola Jurnal akan menjunjung tinggi hak moral penulis.
- Aspek legal formal terhadap akses setiap informasi dan artikel yang tercantum dalam situs jurnal ini mengacu pada ketentuan lisensi Creative Commons Atribusi-Non Commercial-No Derivative (CC BY-NC-ND), yang berarti bahwa hanya dengan izin penulis, informasi dan artikel Jurnal AT-TASYRI' dapat didistribusikan ke pihak lain dengan tanpa merubah bentuk aslinya untuk tujuan non-komersial.
- Setiap terbitan Jurnal AT-TASYRI', baik cetak maupun elektronik, bersifat open access untuk tujuan pendidikan, penelitian, dan perpustakaan. Di luar tujuan tersebut, penerbit atau pengelola jurnal tidak bertanggung jawab atas terjadinya pelanggaran hak cipta yang dilakukan oleh pembaca atau pengakses.