MONETARY POLICY TRANSMISSION AND CREDIT CARDS: EVIDENCE FROM INDONESIA

K.P. Prabheesh () and R. Eki Rahman ()
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K.P. Prabheesh: Indian Institute of Technology Hyderabad
R. Eki Rahman: Bank Indonesia

Bulletin of Monetary Economics and Banking, 2019, vol. 22, issue 2, 137-162

Abstract: This paper empirically tests the dynamics of credit cards and monetary policy in the context of Indonesia. Using monthly data from 2006 to 2018 and a structural vector autoregressive model, our findings indicate that credit card usage is mainly driven by Indonesia’s fast economic growth over the last decade, which indeed reflects the role of credit cards in consumption smoothing. The study also finds that monetary policy transmission through the lending channel is weak, with a more prevalent role for exchange rates and global oil prices in the transmission process.

Keywords: Monetary policy; Structural vector autoregression; Credit cards (search for similar items in EconPapers)
JEL-codes: E44 E50 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:22:y:2019:i:2a:p:137-162

DOI: 10.21098/bemp.v22i2.1039

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