This paper analyzes the excess liquidity especially on banking industry and its impact on monetary policy on Indonesia. We firstly investigate the determinants of bank behavior on their favor for exces liquidity both for precautionary motive and involuntary, and furthermore determine the threshold between low and high excess liquidity regimes. On the next step, this paper evaluates the impact o…
This paper analyzes the excess liquidity especially on banking industry and its impact on monetary policy on Indonesia. We firstly investigate the determinants of bank behavior on their favor for excess liquidity both for precautionary motive and involuntary, and furthermore determine the threshold between low and high excess liquidity regimes. On the next step, this paper evaluates the impact …
This study investigates the comparative pass-through of policy rate to the retail prices, spillover of prices between Islamic and conventional banking systems, and the impact of excess liquidity on these pass-throughs using data from interbank market of Pakistan. The results suggest that the monetary policy shock affect retail prices of Islamic banks similar to conventional banks, confirming th…