WISELY IN BUYING GOODS CAN REDUCE INFLATION IN DIGITAL ERA OF

CENTRAL BANK

( Melinda Tri Putri – Poltekkes Kemenkes Kota Bengkulu )

The phenomenon of inflation in Indonesia is still one of the various macro economic
"diseases" that disturbs the government first for the people. The Central Statistics Agency
(BPS) defines of inflation is rising prices of goods and services, at the same time that
continues to increase, and also according to BI (Bank Indonesia) as the central bank to say
rising prices of goods and services cause a decrease in the value of money.

Thus, inflation can also be interpreted as a decrease in the value of money against the
value of goods and services in general . Inflation itself has various types, namely mild
inflation, moderate inflation, high inflation and hyperinflation. According to the Indonesian
bank, inflation is said to be mild if the price increase of goods is still below 10% per year.
Moderate inflation when prices go up 30% per year. High inflation, which is the price of
goods or services has increased by around 30% -100% and hyperinflation, which is an
increase in the price of goods exceeding 100% per year.

However, not all price increases can be said to be inflation as during feast day and
another holidays in general the price of goods will increase but, after the feast day is over
then prices will fall back. then it cannot be said to be inflation because inflation occurs when
prices rise goods and services occur in goods and services almost completely and in a long
time.

According to the law of cause and effect as a related condition which is related
meaning that when there is inflation there must be a cause and effect of inflation itself.
Therefore, the cause of inflation can originate from the first is the increase in demand
(Demand Pull Inflation), where it says here the increased purchase demand for an item is not
directly proportional to the availability of goods, for example, the demand for " Chile "is a lot
but the availability of Chile in the market is small because of crop failure that makes Chile
availability decreases and cannot meet the demand figures, this can lead to high vegetable
prices, especially Chile and can cause inflation.

second, the increased cost of production (cost pull inflation) where the price of goods
increases due to increased production costs such as the price of production materials,
production equipment, labor costs increase and the price of transportation fuel used to deliver
the goods, this can affect the increase in prices for goods the. For example the price of
vegetables is initially cheap because of fuel prices and even more taxes that must be paid by
producers. if the cost of producing goods also increases, producers inevitably will also
increase their selling prices and cause inflation.

Third, excess money supply, where when the money supply is more than available
goods, it will cause the ability to buy goods higher. As a result, the more items we want to
buy, the less goods are available so that goods experience scarcity, and the price of goods will
increase. So the more money in circulation the less valuable the money is because the amount
is too much

One example of a country that noted hyperinflation due to printing too much money
that occurred after the second world war was Germany, Zimbabwe and Hungary. They
cannot use the money as a medium of exchange because the goods they need are not enough
and they have too much money to make their own money worthless so many people use it as
toys and to decorate walls at home. Even in Zimbabwae the inflation rate reaches two million
percent, for example in Zimbabwae to buy three eggs can reach the price of 100 billion
dollars per year because of the scarcity of goods needed.

according to central bank data, inflation in Indonesia rises and falls. the highest
inflation was in 1998, amounting to 77.63% when Indonesia experienced a monetary crisis in
the price of goods which continued to increase. Inflation at that time also added to the
number of layoffs in Indonesia, causing the number of poor people in Indonesia to increase to
50% of the population.

High inflation can be reduced in various ways, starting from Bank Indonesia (BI) as a
central bank that plays an important role in making inflation rates stable in the first way,
implementing monetary policies such as limiting lending, limiting the amount of money in
circulation, and increasing cash reserves . Second, carry out fiscal policies such as, reducing
state expenditure, reducing foreign debt, and making tax effective.

In addition to the public government, especially young people, they can also play a
role in dealing with high inflation, namely by buying domestic products to help encourage
producers in Indonesia to always develop so that the goal of BI automatically reduces state
spending on imported goods from abroad can be neutralized. Then by saving, young people
can help reduce high inflation by saving to reduce excessive money circulation, high inflation
also makes people reluctant to save so the central bank will raise the BI rate to attract the
attention of people to save.

Buy products as needed. One effective way to reduce high inflation is to buy goods as
needed. When the price of goods goes up, people usually save a lot of goods for inventory.
However, that is precisely what makes the inflation rate high because storing goods for use as
excess inventory will result in the scarcity of these goods so that demand is greater than the
availability of goods supplied by producers. then it is wise to buy goods according to your
needs.

Buying as needed also can reduce the risk of the government importing goods,
because when importing goods from the United States for example, the value of the
American currency is getting higher but on the contrary for Indonesia the value of the rupiah
will decrease. Because it is very important for us to buy domestic products but with
reasonable capacity. So buying goods as needed can pressure unscrupulous persons not to
increase prices carelessly and thus BI can monitor the rate of ups and downs of prices in
Indonesia.

Does inflation always bad? the answer is no. Inflation is still needed so there is always
demand and supply. However, inflation must remain stable so that the value of the currency
will continue to be high. Does low inflation always profitable? the answer is no. because the
price of goods that is too low is the opposite of inflation, namely deflation

Thus it can be concluded that in the era of the central bank there is an important role
for the public, especially youth, to be able to know things about inflation, high inflation is
inversely proportional to the value of the currency, the higher the inflation, the lower the
currency so we must maintain inflation stability so hyperinflation does not occur.

Inflation must always be maintained stability to continue to advance the welfare of the
people of Indonesia and the younger generation is the generation that will continue the
existing civilization by changing excessive lifestyles, and prioritizing domestic products and
controlling lifestyles that have a desire to buy excessively. because all that is done to
overcome cheating - cheating will occur in everyday life. Starting from ourselves, by us and
for all of us. keep the greeting spirit of Indonesian youth. When inflation is stable, the impact
of all this is prosperity for all Indonesian people.