The Macroprudential Policy: An Analysis of Indonesia’s Financial System Stabilities

One of the macroprudential policies that are often used mainly in Asia and including Indonesia
is the Loan-to-Value policy with a function to overcome systemic risks related to housing price
spikes and credit distribution. Data analysis uses Vector Auto Regression (VAR) and
simultaneous equations (Simultaneous Regression). The data in this study is time-series data.
Exchange rate variables have negative impact on inflation because rate of exchange instability
will affect capital flows or investment and international trade. And tax variables have an
insignificant negative effect on inflation due to the impact of rising inflation due to the shock
of tax increases in taxes that are seen as increasing production costs and sales costs to consumers
but in contrast to credits that have an insignificant positive effect on inflation.