Stability of Money Value in Islamic Economics: Analysis of Money Supply and Inflation in Indonesia

Abstract

The stability of currency value is one of the important principles in maintaining economic balance and social justice, as taught in Islamic sharia. This study uses secondary data obtained from official publications of Bank Indonesia and the Central Bureau of Statistics (BPS) for the period 2010–2024. The analytical method used is multiple linear regression with a quantitative approach to examine the effect of changes in the money supply (M2) on the inflation rate. The results of the study indicate that an increase in the money supply has a significant relationship with the inflation rate in Indonesia. From the perspective of Islamic economics, these results reaffirm the importance of implementing monetary policies based on the principles of justice, balance, and prohibition of usury and speculation that could disrupt the stability of the currency's value. Therefore, maintaining a balanced money supply according to the real needs of the economy becomes key to achieving currency stability in a just manner according to Islamic economic principles