Bank of Indonesia as Monetay Authority M. Khairul Bahri (24007044)
So graduate diploma is very important, but it will not be automatically qualified graduates. Mucheffort should be made to produce quality graduates.
Likewise with independence
. With the existence of an independent status does not necessarily meanthat the central bank would be able to achieve its objectives. The central bank also does not mean itwill be transparent and consistent with itself. Absolutely needed a strategy and a planned program tobuild the independence of central bank as we expect.Independence means that the responsibility is clear (clear accountability). This means that Bank Indonesia as the central bank was given a clear responsibility to control the state of monetaryeconomics. Bank Indonesia was given the responsibility to determine the rate of inflation, interestrates and exchange rates to formulate policies to achieve these targets (instrument independent).BI cases during the old order and the new order to show that monetary policy should not be intervenedby other policies that macroeconomic variables (such as exchange rates, inflation) can be controlled.The term that is closely related to monetary policy are: monetary policy is not subordinate the otherpolicies. [Monetary policy should not be sacrificed for the benefit or other policies].We can see from the fall of President Sukarno and Suharto, that the political turmoil that had broughtdown two presidents started with the collapse of the Indonesian economy is marked by very highinflation.
BI independence of monetary authorities is very important as balanced with adequate transparencyand accountability. Since the independence of BI have the discretion in determining the use of thebudget (a minimum capital of BI according to Law No. 23, 1999: Rp. 2 trillion).Using a very large budget certainly requires accountability mechanisms. The independence that arenot balanced with accountability would reduce the level of public trust (including internationally).Low level of trust has implications for the cost of handling a larger inflation (that means also adecrease of foreign exchange). Inflation also has implications for the large decline in economicgrowth and handling of unemployment. In other words, the independence of BI in a transparent andaccountable is important for all classes of society: not only members of House of Representatives whofeel the benefits of independence of the BI which is accountable but included among the businesscommunity and other communities.If aspects of independence, transparency and accountability are met, then create a forward lookingeconomic expectations. The point is that people believe that BI is the central bank independent andcredible and believe that BI will be able to guarantee a stable exchange rate, interest rates andinflation rates. If inflation expectations in the business world (society) in accordance with theexpectations of BI, the cost to bring down inflation to be lower.
The result of the collective / aggregate
Independence of the BI which is characterized by freedom in conducting monetary policy and theappointment of the board of governors by the president and approved by the House of Representatives. But there is also a lack of independence of BI, for example, flow of funds controlledby the case of BI to the House of Representatives and legal assistance for some retired BI officials.Independence of the of BI moved into irresponsible actions.Since 2004, Bank Indonesia to channel funds to the Indonesian Banking Development Foundation(YPPI), half of these funds are given to officials of the BI-related legal cases and the remainder isgiven to the House of Representatives.Please note, that the BI is government cash so only with thegovernment affairs of the BI has a debt NOT to House of Representatives.This case was revealed