FORECASTING MONEY SUPPLY USING GARCH METHOD FOR INDONESIA REDENOMINATION POLICY

Money Supply GARCH Forecasting Redenomination

Authors

5 December 2024
12 December 2024

The success of redenomination as a monetary policy depends on the country’s fundamental economic situation. Money supply, as one of the factors, indicates the occurrence of inflation, so it needs to be examined as a consideration for redenomination decision-making. Using the GARCH method, forecasting the money supply with the intention to determine its stability and Indonesia’s readiness for it.  The data sourced from Bank Indonesia. It was found that a stable and consistent pattern of money supply (M2) each year concluded that Indonesia could potentially implement redenomination in time to come.