Monetary Policy Transmission and Inflation Dynamics in Indonesia: Evidence from BI7DRR, Money Supply, Exchange Rate, and Structural Breaks

Background: Several monetary policy instruments can influence inflation; however, in the case of Indonesia, the transmission of these policies is highly dependent on external shocks, such as wars and oil price fluctuations. Objective: The purpose of this study is to investigate the monetary policy transmission mechanism affecting inflation in Indonesia using the BI 7-Day Reverse Repo Rate (BI7DRR), money supply (M2), exchange rate, and structural breaks over the period 2019–2024. Methods: This s