Impact of Electronic Money on Monetary Policies in Indonesia

Pribawa E Pantas; Akhmad Arif Rifan; Sunu Prasetya Adi; Nurul Heniirawati; Erina Eriyanti

doi:10.98765/apjbet.v5i01.75

Pribawa E Pantas Universitas Ahmad Dahlan
Akhmad Arif Rifan Islamic Banking Department, Universitas Ahmad Dahlan
Sunu Prasetya Adi Islamic Banking Department, Universitas Ahmad Dahlan
Nurul Heniirawati Islamic Banking Department, Universitas Ahmad Dahlan
Erina Eriyanti Islamic Banking Department, Universitas Ahmad Dahlan

DOI: https://doi.org/10.98765/apjbet.v5i01.75

Keywords: electronic money, monetary policies, pls-sem

Abstract

This study aims to empirically analyze the impact of electronic money (e-money) on monetary policies in Indonesia. Partial Least Squares Structural Equation Modeling (PLS-SEM) is used as an analysis tool to answer the research purposes. The research data will obtain from Bank Indonesia publications and presented in the form of monthly data from January 2014 to December 2021. This study is going to use two latent variables, namely e-money as formed by the growth of volume, supply, value, and infrastructure; and monetary policies as reflected by broad money supply, inflation, interest rates, and foreign exchange rates. The result is that electronic money has a negative and significant impact on monetary policy in Indonesia. This study can provide input to policyholders regarding monetary quantities that must be classified appropriately so as not to cause errors in determining monetary policy.