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Model of Islamic Monetary Operation for Liquidity Management in Islamic Banking: Case of Indonesia 2000-2009

Gadjah Mada International Journal of Business

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Title Model of Islamic Monetary Operation for Liquidity Management in Islamic Banking: Case of Indonesia 2000-2009
 
Creator Ismal, Rifki
 
Subject Indonesia Sharia Certificate (SBIS); currency in circulation; islamic banking; open market operation (OMO); reserves requiremen; Sharia
 
Description The paper attempts to construct the model of islamic monetary operation for liquidity management in islamic banking. Particularly, the model investigates variables that determine the role of the central bank in managing liquidity. Firstly, it explores the related conventional models and chooses one to find general variables involved in monetary operations for managing liquidity. Secondly, it formulates the islamic model after considering the islamic monetary operation principles, characteristics of both islamic monetary instruments and Indonesian islamic banking industry. Specifically, it models Bank Indonesia’s islamic monetary instrument called Bank Indonesia Sharia Certificate (SBIS). Thirdly, the model points out that the volume of SBIS is influenced by reserves requirement, currency in circulation, and prior auctions of SBIS. It means that the application of islamic OMO is not significantly different from monetary instrument in conventional OMO. Therefore, the paper suggests the issuance of islamic investment monetary instruments to implement the ideal islamic monetary instrument and OMO.
 
Publisher Master of Management, Faculty of Economics and Business, Universitas Gadjah Mada
 
Date 2009-01-12
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://journal.ugm.ac.id/gamaijb/article/view/5528
 
Source Gadjah Mada International Journal of Business; Vol 11, No 2 (2009): May - August; 149 - 165
2338-7238
1411-1128
 
Language eng
 
Relation http://journal.ugm.ac.id/gamaijb/article/view/5528/4500