Jakarta (Indonesia Window) – Bank Indonesia (BI) noted that economic liquidity or money supply in a broad sense (M2) in May 2022 reached 7,854.8 trillion rupiahs (some 529.6 billion U.S. dollars), or grew 12.1 percent compared to the same period last year (year-on-year/yoy).

This growth remains strong compared to that in April 2022 which was recorded at 13.6 percent (yoy), the Head of the BI Communications Department, Erwin Haryono, said in an official statement here on Tuesday.

This development was mainly driven by the growth in the money supply in the narrow sense (M1) by 18.4 percent (yoy) and quasi money by 4.6 percent (yoy).

Since the September 2021 data position, M1 consists of currency outside commercial banks and rural banks, rupiah current accounts and rupiah savings which can be withdrawn at any time.

Meanwhile, M2 growth in May 2022 was mainly influenced by developments in government financial expansion and credit disbursement which was not as high as the previous month.

The government's financial expansion slowed as reflected in net bills to the central government which grew 3.8 percent (yoy), lower than the growth in April 2022 of 22.3 percent (yoy).

Furthermore, Erwin said, lending in May 2022 grew 8.7 percent (yoy), relatively stable compared to the previous month's growth of 8.9 percent (yoy).

Credit granted is limited to loans only and does not include financial instruments that are equivalent to loans, such as marketable securities, acceptance claims, and repo claims.

In addition, loans disbursed do not include loans granted by commercial bank offices domiciled abroad, and loans extended to the central government and non-residents.

On the other hand, net foreign assets contracted 2.9 percent (yoy), improving compared to the contraction of 4.4 percent (yoy) in the previous month.

Reporting by Indonesia Window