The Impact of the use of E-money on Interest Rates with the Amount of Money Circulation as an Intervening Variable: A case study of Indonesia

Abstract

Users of e-money payment instruments in Indonesia continue to experience growth every year. An increase in the need for e-money users to transact, causes an increase in the need for money supply in Indonesia. So that the stability of money circulation needs to be controlled, namely through monetary policy interest rates. The purpose of this study is to examine the impact of the use of e-money on interest rate policies in Indonesia, through the money supply as an intervening variable. The study was conducted at Bank Indonesia, using a statistical test model of path analysis. The test results show that the use of e-money has a significant direct effect on interest rates. While the indirect effect tests, shows that the use of e-money through the variable money supply as an intervening variable, has no significant effect.