A central Bank policy capability or Monetary Authority is to be purpose to influence the real economic activities and price through existing transmission mechanism. Regarding to the above matters, Monetary Authority should have clear understanding about transmission mechanism in their specific country. Transmission Mechanism monetary policy have been defined as an access line of a Monetary Policy to influence the economic condition. In this research, the writter have carry out an Analysis of Monetary Policy of Transmission Mechanism through the Bank Credit Lane against Macro Economics (GDP and Inflation) period of January 2005 to December 2012 using Vector Auto Regression (VAR) method . The Impulse response test result that Bank Credit Line is come into transmission mechanism monetary policy in Indonesia, which proved by monetary policy had been proxy by SBI Interest rate against the Bank’s Credit. The monetary contraction will resulting the three kind of those credits are increase and decreasing in the total credit given by banks. |