JAKARTA - Liquidity of the economy or broad money (M2) grew slower in April 2020. M2 position in April 2020 was recorded at Rp6,238.3 trillion or grew 8.6% (yoy), lower than the previous month's growth of 12.1% (yoy). The slowdown in M2 growth was driven by a slowdown in all its components, both narrow money (M1), quasi money, and securities other than shares.
M1 grew slower from 15.4% (yoy) in March 2020 to 8.4% (yoy) in April 2020 due to slowing rupiah demand deposits. In addition, quasi money in April 2020 grew slower, from 10.8% (yoy) in March 2020 to 8.5% (yoy). The slowdown also occurred in securities other than shares, from 44.6% (yoy) in the previous month to 20.6% (yoy) in April 2020.
Based on influencing factors, the slowdown in M2 growth in April 2020 was caused by a contraction in government financial operations and a slowdown in lending. Net claims to the central government also slowed down, from 14.5% (yoy) in March 2020 to 1.7% (yoy).
Lending also slowed down in April 2020, from 7.2% (yoy) in the previous month to 4.9% (yoy). Meanwhile, net foreign assets in April 2020 grew by 15.8% (yoy), higher than the growth in March 2020 of 13.9% (yoy), thereby curbing the slowing down of money in circulation. (LM)