Financial stability in the Indonesian monetary policy analysis

Figures & data

Figure 1. Inflation (%) and Interest Rate (%) in Indonesia, 2006Q1-2010Q4.

Source: Bank Indonesia (processed)

Figure 2. Inflation (%) and Interest Rate (%) in Indonesia, 2011M1-2018M12.

Source: Bank Indonesia (processed)

Figure 3. Money Supply (Billions of Rp) in Indonesia, 2006M1-2018M12.

Source: Bank Indonesia (processed)

Figure 4. Exchange Rate (IDR/USD) in Indonesia, 2006Q1-2018Q4.

Source: Bank Indonesia (processed)

Figure 5. Bank Indonesia Financial System Stability Index.

Notes: The green area is normal condition while the red one is suspected crisis.

Source: Bank Indonesia (processed)

Table 1. Descriptive statistics

	AFSI	MS	IR	ER
Mean	0.531750	2,593,015.	7.660750	10,136.81
Median	0.525000	2,406,014.	7.500000	9305.770
Maximum	0.620000	4,481,401.	12.75000	13,850.88
Minimum	0.370000	1,197,153.	5.750000	8590.370
Std. Dev.	0.059910	1,021,308.	1.744816	1490.019
Skewness	−0.879909	0.358870	1.440930	1.154985
Kurtosis	3.743571	1.853371	4.812609	3.095502

Table 2. Estimation result of the stationary stochastic process at level

Variable	Prob. ADF Test	t-Statistic ADF Test	Critical Value (5% level)
LAFSI	0.2156	−2.1827	−2.9411
LMS	0.6135	−1.3140	−2.9390
LIR	0.0200	−3.3377	−2.9411
LER	0.8400	−0.6789	−2.9411

Table 3. Estimation result of the difference stationary process at first difference

Variable	Prob. ADF Test	t-Statistic ADF Test	Critical Value (5% level)
LAFSI	0.0008	−4.5290	−2.9411
LMS	0.0000	−6.2153	−2.9411
LIR	0.0047	−3.9155	−2.9434
LER	0.0014	−4.3555	−2.9411

Table 4. Estimation result of the long-run model: dependent variable is LAFSI

Variable	Coefficient	t-Statistic	Prob.
LMS	0.2817	2.4620	0.0187**
LIR	0.4161	2.4763	0.0181**
LER	−0.3292	−1.2485	0.2199
C	−2.5817	−2.0905	0.0437

Notes: *) significant at $\alpha =1\mathrm{\%}$; **) significant at $\alpha =5\mathrm{\%}$; ***) significant at $\alpha =10\mathrm{\%}$ level of confident

Table 5. Estimation result of the error correction model: dependent variable is ∆LAFSI

Variable	Coefficient	t-Statistic	Prob.
D(LMS)	−0.9391	−1.4283	0.1623
D(LIR)	−0.4149	−2.3356	0.0256**
D(LER)	0.1437	0.5288	0.6004
RESIDUAL(−1)	−0.2400	−2.5063	0.0171**
C	0.0259	1.1150	0.2727

Notes: *) significant at $\alpha =1\mathrm{\%}$; **) significant at $\alpha =5\mathrm{\%}$; ***) significant at $\alpha =10\mathrm{\%}$ level of confident