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The Optimal Monetary Policy Instruments: The Case of Indonesia

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  • Yoga Affandi

    (Bank Indonesia)

Abstract

In 1999, the central bank of Indonesia, Bank Indonesia, gained its independence. The new Central Bank Act has established a more explicit foundation for Bank Indonesia’s independence. Firstly, goal independence, in which Bank Indonesia sets its own monetary target. Secondly, instrument independence, in which Bank Indonesia implements various policy instruments to achieve that target. The primary objective of Bank Indonesia (henceforth BI) is to achieve and maintain price stability reflected in a low and stable inflation rate.

Suggested Citation

  • Yoga Affandi, 2002. "The Optimal Monetary Policy Instruments: The Case of Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 5(3), pages 56-70, December.
    • Handle: RePEc:idn:journl:v:5:y:2002:i:3c:p:56-70
    DOI: https://doi.org/10.21098/bemp.v5i3.313
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    References listed on IDEAS

    as
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    2. William Poole, 1969. "Optimal choice of monetary policy instruments in a simple stochastic macro model," Special Studies Papers 2, Board of Governors of the Federal Reserve System (U.S.).
    3. William Poole, 1970. "Optimal Choice of Monetary Policy Instruments in a Simple Stochastic Macro Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(2), pages 197-216.
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