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 JOURNAL REVIEWS
Title Sharia Monetary Policy Instruments in
Indonesia
Journal Name Journal of Visionary Sharia Economy

Volumes and Pages Vol.01, No.01, and 19-33

Year 2022

Writer Abi Suar, Zandy Pratama, and Hijrasil

Reviewer Saifudin Hi. Man

Reviewer Date December 12, 2022

Background Monetary policy is an attempt to control

macroeconomic conditions so that they
operate as desired by controlling the
amount of money that circulates in the
economy. These efforts are aimed at
ensuring price stability and inflation and
increasing equilibrium output. Almost all
sectors of the capitalist economy are
related to the interest system so that the
monetary sector develops faster than the
monetary sector. This is because the
monetary sector is more profitable than
the real sector.
Within the framework of macroeconomic
policy, this Islamic economic system
touches on both fiscal policy, monetary
policy, and real sector policy. However,
primarily this system is closely related to
monetary policy. This is because
monetary policy is primarily used to
influence financial variables such as
interest rates and money supply. By
regulating these two financial variables, it
is hoped that the stability of the value of
money will be achieved so that in the end
 economic stability will be achieved as
well.
Research purposes The purpose of this study is to find out
how Islamic Monetary Policy Instruments
are defined, schools of thought and their
implementation in Indonesia.
Problems So the problem is that the economy of a
country is very closely related to monetary
policy. General monetary policy is carried
out using interest rate instruments.
However, in reality this interest rate is
heavily influenced by economic turmoil.
So that sometimes this interest rate
becomes one of the triggers for an
economic crisis that occurs in a country.
Therefore, sharia monetary policy is one
of the answers to these problems. In
Islamic monetary policy, there is no
known interest system. The instruments
used in Islamic monetary policy are also
different from monetary policy in general
because they are not familiar with the
interest system. However, precisely with
the unknown system of interest,
Research methodology This study uses the literature review
method using a systematic literature
review approach or often abbreviated as
SLR or in Indonesian it is called a
systematic literature review is a method of
literature review that identifies, assesses,
and interprets all findings on a research
topic, to answer existing research
questions. . predetermined (Kitchenham &
Charters, 2007).
The SLR method is carried out
systematically by following stages and
protocols that allow the process of
reviewing the literature to avoid bias and
subjective understanding of researchers.
SLR is a literature review method that is
commonly used by researchers in the
pharmaceutical and medical fields,
 although it can be said that Barbara
Kitchenham just started bringing it into
the world of computing, especially for
software engineering in 2007 through her
paper entitled Guidelines for Conducting a
Systematic Literature Review. in Software
Engineering. In general the stages of
doing SLR

Research result The results of the study are that in Islamic

economics, there may not be an interest
device so that the bank concerned cannot
apply the discount rate coverage. Islamic
Imperative Bank requires interest-free
instruments to manipulate financial
economic policies in Islamic economics.
important to increase or decrease
remittances. The abolition of the interest
system no longer hinders the control of
cash remittances in the economy. Gadgets
that can be applied in the Islamic financial
system can be reached with the dominant
tools, namely quantitative manipulation of
the distribution of credit scores and
determining socio-economic goals.
Quantitative manipulation of credit
distribution is supported by instruments
such as: minimum statutory reserves;
credit limit; government savings; ordinary
pool; moral persuasion; equity based
tools; and trade-offs in profit-sharing and
revenue sharing ratios. Meanwhile,
realizing socio-monetary goals is to treat
the money generated as fay; and goal-
oriented allocation of credit scores. So that
monetary policy can use instruments
either directly or indirectly. Direct
instruments are monetary policy control
instruments that can directly influence the
operational targets desired by the central
bank. Indirect instruments are monetary
control instruments that can indirectly
affect the operational targets desired by
 the central bank. The two main things that
are controlled are prices (interest rates)
and the amount of deposits and loans in
the banking system or financial
institutions other than banks. This direct
control can be exercised through direct
policies issued by the central bank or by
influencing the balance sheets of
commercial banks. This control is called
direct because there is a one-to-one
correspondence relationship between the
instrument and operational objectives. For
example, setting credit limits can directly
affect the amount of domestic credit that
can be disbursed by banks, which in turn
will affect the money supply.
While indirect instruments are attempts to
control monetary amounts by influencing
the bank's central balance sheet. One of
the important things in indirect
instruments is that the central bank can
affect the basic money position known as
bank reserves which in turn can affect
credit and the money supply (Alexander,
et al., 1995). This method is called
indirect because the central bank achieves
its policy objectives by influencing money
market conditions through one of its
functions as an institution that has the
authority to circulate money by
influencing the conditions underlying the
supply and demand for money.
Advantages The modeling contained in this study is
very helpful in showing more accurate
research results.
Deficiency The literature used in this study is still
relatively small, so that theoretical
reinforcement for this research is still
lacking.