RETESTING OF PROCYCLICALITY IN INDONESIAN SHARIA BANKING DURING THE COVID-19

Introduction: The Covid-19 pandemic is unique because the financial sector usually affected earlier when a shock occurs, but in this incident, real industry more affected. Differences of opinion regarding procyclicality maintain importance early indication. Methods: This study aims to reexamine Islamic banking using VAR/VECM method. Results: results show that banks are proxies support economic development without causing bubbles. Conclusion and suggestion: avoidance MAGHRIB (Maysir, Gharar Riba) ultimately makes have financing characteristics different from conventional loans.