Jakarta (Indonesia Window) – Indonesia’s central bank, Bank Indonesia (BI), has noted that the money supply in a broad sense (M2) or economic liquidity in December 2021 increased by 13.9 percent compared to the same period in the previous year (year on year/yoy) to 7,867.1 trillion rupiahs (some 548.6 billion U.S. dollars).

The increase was driven by the acceleration of the money supply in the narrow sense (M1) by 17.9 percent (yoy) and the quasi money by 9.3 percent (yoy).

Chief Executive Director of BI’s Communications Department Erwin Haryono said in an official statement here on Monday (Jan. 24) that the growth of M2 in December 2021 was influenced by the expansion of government finances and lending.

The government's financial expansion was reflected in net bills to the central government which grew by 37.7 percent (yoy), an increase compared to that in November 2021 of 30.4 percent.

The credit disbursement also grew by 4.9 percent (yoy), up from 4.4 percent (yoy) in the previous month.

He also pointed out that the M1 acceleration was mainly due to the growth in currency, rupiah demand deposits, and rupiah savings which could be withdrawn at any time.

The currency circulation in December 2021 was recorded at 831.2 trillion rupiahs (some 57.9 billion dollars) or grew 9.4 percent (yoy) higher than the previous month at 8.8 percent (yoy). The upsurge was in line with the increased community activity and the decline in COVID-19 cases in Indonesia by the end of 2021.

Reporting by Indonesia Window