Monetary Determinants of the Green Economy in Indonesia: Empirical Evidence for the Period 2015–2025

Abstract

Green Economy is a sustainable development strategy that aims to create economic growth while maintaining environmental sustainability. The success of Green Economy implementation is influenced not only by environmental policies, but also by macroeconomic stability, particularly through monetary policy instruments. This study aims to analyze the influence of benchmark interest rates, inflation, exchange rates, and the money supply on the Green Economy in Indonesia. The study uses a quantitative approach with multiple linear regression analysis methods. The data used are annual secondary data for the period 2015–2025 obtained from Bank Indonesia (BI), the Central Statistics Agency (BPS), and other official sources. The results of the study indicate that partially only the exchange rate has a negative and significant effect on the Green Economy , while the benchmark interest rate, inflation, and the money supply have no significant effect. Simultaneously, these four variables do not have a significant effect on the Green Economy in Indonesia. The research findings indicate that the development of the Green Economy in Indonesia is not entirely influenced by monetary factors, but is also influenced by other factors such as government policies, green investment, technological innovation, and sustainable financing. Therefore, synergy between monetary policy and sustainable development policies is needed to accelerate the transition to a Green Economy in Indonesia.