TOWARD OPTIMUM SYNERGY OF MONETARY POLICY IN DUAL FINANCIAL/BANKING SYSTEM
| Main Author: | Perpustakaan UGM, i-lib |
|---|---|
| Format: | Article NonPeerReviewed |
| Terbitan: |
[Yogyakarta] : Universitas Gadjah Mada
, 2009
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| Subjects: | |
| Online Access: |
https://repository.ugm.ac.id/27655/ http://i-lib.ugm.ac.id/jurnal/download.php?dataId=10717 |
Daftar Isi:
- In a country adopting dual financial/banking system, where a conventional financial system coexists with an Islamicfinancial system, monetary authority has the responsibility to maintainfinancial/monetary stability and synergy of both systems. This study analyses and compares one of the main pillars of conventional monetary system and Islamic monetary system (i.e., interest system vs. profit-and-Ioss sharing/PLS system) and try to come up with the possible conduct of optimum monetary policy under dual financiallbanking system. The results show that PLS system is superior to interest system in fairness, justice, efficiency, and stability. Therefore, the optimum synergy in the dual financiallbanking system can be aclJieved when monetary policy in conventional system benchmarks its policy rate to the PLS market return in Islamicfinancial market of Islamic system, which will ensure optimum market efficiency that maximize distributive social welfare andjustice. Monetary policy in managing money supply is only a response to the dynamic activity in the real sector. While, active monetary policy can be conducted, not by altering M, but by altering V. i.e. to increase theflow of money in the economy by issuing central bank SUKUK with PLS market retum to finance government projects, commercially as well as socially, in the real sector. Keywords: Islamic Monetary System, Islamic Financial System, Dual Banking Financial System