Dinar and Dirham As One Alternative Inflation Control Solution in Indonesia

Martono, Budi (2019): Dinar and Dirham As One Alternative Inflation Control Solution in Indonesia. Published in: (12 July 2019): pp. 1-5.

Abstract

The phenomenon of soaring inflation and the depreciation of a country's currency has become a factual discussion on several discussions of economic disciplines. In the context of the rupiah exchange rate, an empirical fact explains that in some periods, the currency of the Republic of Indonesia, the rupiah, continued to weaken against the currencies that became references such as USD and Euro. It becomes interesting when you notice that some countries have the same profile as Indonesia, a currency issue becomes a global issue. Especially when we notice that the weakening of a country's currency will correlate in line with the soaring increase in inflation in a country. The economic growth of a country is influenced by several factors including the positive trade balance, significant GDP growth, and in some areas, a stable currency. It is common knowledge, that Indonesia as a country that has a high dependence on imports, always faces endless conditions when its import payments must be made using the dollar or euro. The amount issued by IDR to buy 1 USD is now almost reaching Rp. 15,000. Inevitably, the country's foreign exchange reserves as a barometer of a nation's economic strength when facing a crisis become a challenge. The need for a very high USD currency from large corporations and profit-seeking individuals from currency buying and selling transactions, adding to the burden of the IDR became even more severe which in turn also affected the soaring inflation.

• Item Type: MPRA Paper
• Language: English
• Keywords: Dinar and Dirham, Alternative, Inflation Control Solution.
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E25 - Aggregate Factor Income Distribution; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E41 - Demand for Money; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; G - Financial Economics > G2 - Financial Institutions and Services

References

Amalia, Euis. 2005. Sejarah Pemikiran Ekonomi Islam dari Masa Klasik hingga Kontemporer. Jakarta; Pustaka Asatruss. Hamidi, M.Luthfi. 2007. Gold Dinar System Moneter Global yang Stabil dan Berkeadilan. Jakarta: Senayan Abadi Publishing Huda, Nurul. 2008. Ekonomi Makro Islam Pendekatan Teoris. Jakarta: Kencana Prenada Media Group http://dinarfirst.org/standar-dinar-dan-dirham-dalam-sejarah-dan-fikih-islam/