This study tries to analyze shariah transmission mechanism in Indonesian dual monetary system, using Vector Auto Regression (VAR) and Vector Error Correction Model (VECM) methods.Results show that the relationship between SWBI (SBI Shariah) and shariah financing (LNFINCG) is negative. It means, when SWBI be higher, the quantity of shariah financing would be lower. And so do SBI and inflation (LNIHK). When the total of shariah financing be increase, it will gives positive contribution for reducing inflation rate in Indonesia, because with this system possibility to make equal growth among monetary and real sectors appears. Therefore, it will be strategic action for monetary authority to grow up shariah banking share in Indonesia, for minimizing bad inflation in economy.
Rusydiana, AS (2009), Mekanisme transmisi syariah pada sistem moneter ganda di Indonesia, Buletin Ekonomi Moneter dan Perbankan BI, Volume 11, Nomor 4, April 2009
