Yogyakarta- Dr. Nano Prawoto, SE, M.Si., Lecturer from Economy Faculty of University of Muhammaidyah Yogyakarta (FE UMY) has successfully accomplished his dissertation entitled “Monetary Phenomena Cash Demand: Study of Influencing Factors” Saturday afternoon (2/4). The dissertation was written down to achieve doctor from Economy and Development study doctoral program of economy University of Diponegoro. Nano graduated with GPA of 3,75 and Cumlaude predicate.
In research of analyzing factors influencing cash demand in Indonesia, Nano explains that long term intervention or effectiveness of monetary policy merely affects on deposit demand. Nevertheless, currency demand shows no significant effect.
In short term, the result shows that intervention or effectiveness of monetary policy remains ineffective in affecting cash demand both in deposit or currency. “Particularly dealing with rate of interest of Central Bank certificate,” he adds.
From the analysis, Nano offers the implication of policy in minimizing problems anticipated by the public is transparent monetary policy. In assisting public expectancy, Nano also views the need of communication between the central bank and public.
Other efforts, according to Nano, is stability of system policy in identifying source of instability of financial system. It can be conducted by doing research and analysis of condition of advanced financial system to see risk potential. The last policy offered by Nano is to supervise exchange board to remain efficient.
In relation to cash demand that public behavior tend to be different, Nano explains that there should be positive action like policy to flow menjelaskan perlu adanya tindakan postif seperti kebijakan menyalurakan fractional currency. This would benefit compared to expend or rise the money in high value or in deposit as well.
Besides, in monetary policy, it is a most for the authority to keep the stability of the exchange of Rupiah toward US dollar, one is to mark BI rate accepted by the market. This can keep proportional difference between domestic interest and menjaga selisih yang tidak terlalu lebar antara suku bunga domestic interest and rate of interest abroad.
Furthermore, this former of Head of Economy and development study program (IESP) UMY suggest that the other could be done by the authority is to keep foreign currency market efficient. This is the same as keeping stability of Rupiah exchange. Thus, flexibility of domestic rate is needed related to fluctuation of rate of interest abroad so that speculative motif harming the state economy could be anticipated.
In completing this dissertation, Nano was promoted by Prof. Dr. FX. Sugiyanto, MS. With Co-Promotor Prof Dr. Miyasto, SU and Prof. Syarifudin Budiningharto, SU. (www.umy.ac.id)
(Trans by hm-uhamka)