This chapter explains the essence of money based on the variables that influence and are impacted, namely inflation, exchange rates, and interest rates. The discussion not only focuses on the nature of money itself but also reflects the extent to which a country can successfully maintain currency stability, at home and internationally, including inflation and exchange rates. The nature of exchange rates is also discussed in this chapter, namely how money has been used to create a system known as interest rates. On the other hand, Islam takes a different perspective by prohibiting riba. True Islam forbids interest rates in the economy as haram. Therefore, the chapter also explains alternative interest-free monetary system controls.

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Inflation, Exchange Rates, and Interest Rates

  • Solikin M. Juhro,
  • Ferry Syarifuddin,
  • Ali Sakti

摘要

This chapter explains the essence of money based on the variables that influence and are impacted, namely inflation, exchange rates, and interest rates. The discussion not only focuses on the nature of money itself but also reflects the extent to which a country can successfully maintain currency stability, at home and internationally, including inflation and exchange rates. The nature of exchange rates is also discussed in this chapter, namely how money has been used to create a system known as interest rates. On the other hand, Islam takes a different perspective by prohibiting riba. True Islam forbids interest rates in the economy as haram. Therefore, the chapter also explains alternative interest-free monetary system controls.