Abstract

Bank Indonesia's primary responsibility in monetary, banking and payment systems is to ensure monetary and financial system stability. Without financial system stability, Bank Indonesia's success in maintaining monetary stability will not be significant. support long-term economic growth. The forces associated with money and monetary soundness resemble different sides of a coin that cannot be separated. Financial stability is the foundation upon which the efficacy of monetary policy is built, and the converse is that monetary policy has a significant impact on financial stability. Because the financial system is one of the monetary policy transmission channels, monetary policy transmission cannot function normally if financial system instability occurs. Conversely, financial system stability will be fundamentally affected by monetary instability due to ineffective financial system operations. Therefore, maintaining financial system stability remains the duty and responsibility of Bank Indonesia.

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