The Effect of Emergency Monetary Policy on Liquidity and Financial System Stability in Property Sector Companies in Indonesia

Abstract

Through a quantitative study utilizing Structural Equation Modeling with Partial Least Squares (SEM-PLS), this research examines the impact of emergency monetary policies on liquidity and financial system stability within Indonesian property sector enterprises. The study takes into account company size, regional distribution, and financial performance by using a broad sample of property sector firms. The validity and reliability of indicators for liquidity, financial system stability, and emergency monetary policies are guaranteed by the measurement model analysis. Contrary to popular belief, the structural model shows that emergency monetary actions have a substantial negative influence on liquidity levels. Complexity can be seen in the relationship between financial system stability and certain policy factors, which can have both positive and negative effects. The robustness of the model is verified by cross-validation and bootstrapping. The results provide sophisticated perspectives to the body of literature by highlighting the necessity of customized methods for formulating policies and devising action plans in the real estate industry amid financial downturns.