Bank Indonesia's Monetary Policy in Maintaining Exchange Rate Stability: A Qualitative Study
DOI:
https://doi.org/10.59971/jumawa.v3i2.461Keywords:
Bank Indonesia, Exchange Rate Stability, Monetary Policy, Qualitative Study, RupiahAbstract
Abstract
The exchange rate of the Rupiah against the US Dollar plays an important role in Indonesia's economic stability. Exchange rate fluctuations influenced by external factors such as global monetary policy and geopolitical dynamics, as well as internal factors such as inflation and current account deficits, pose challenges to national economic stability. Bank Indonesia, as the central bank, plays a strategic role through monetary policies such as setting benchmark interest rates, open market operations, and foreign exchange market interventions to reduce exchange rate volatility. This study uses a descriptive qualitative approach to analyze the strategies and effectiveness of Bank Indonesia's monetary policies in maintaining the stability of the Rupiah during the period 2020–2024. The results show that BI's policies have successfully contained exchange rate volatility through a combination of policy instruments, prudent foreign exchange reserve management, and credible and transparent policy communication. Interest rate adjustments and foreign exchange market interventions have proven effective in responding to external and internal pressures, while strengthening market confidence and reducing economic uncertainty. This research provides an important contribution to understanding the role and effectiveness of Bank Indonesia's monetary policy in the context of dynamic global and domestic economic challenges.
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