Broad Money Growth Decelerated in June 2020 - Bank Sentral Republik Indonesia
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September 18, 2020

Broad money (M2), as a measure of liquidity in the economy, growth decelerated in June 2020. Totalling Rp6,393.7 trillion, M2 growth decreased to 8.2% (yoy) in June 2020 from 10.4% (yoy) one month earlier, held back by all components, namely narrow money (M1), quasi-money and securities other than shares. M1 growth tracked a downward trend from 9.7% (yoy) in May 2020 to 8.2% (yoy) in the reporting period due to a downturn of rupiah demand deposits. Growth of quasi-money fell to 8.1% (yoy) in the reporting period from 10.5% (yoy) in May 2020. Similarly, securities other than shares experienced weaker growth, from 37.5% (yoy) in May 2020 to 31.4% (yoy) in June 2020.

Based on the affecting factors, slower growth of Net Foreign Assets (NFA) and outstanding loans disbursed by the banking industry were the main drag on M2 growth in June 2020. NFA growth was recorded at 12.1% (yoy) in June 2020, down from 18.2% (yoy) one month earlier. Meanwhile, growth of outstanding loans disbursed by the banking industry slumped from 2.4% (yoy) in May 2020 to 1.0% (yoy) in the reporting period. In contrast, the expansionary posture of fiscal operations was reflected by a significant increase of net claims on the central government to 43.0% (yoy) from 11.0% (yoy) one month earlier. 

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Onny Widjanarko
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