JAKARTA - Liquidity of the economy or broad money (M2) grew higher in May 2020. M2 position was recorded at Rp6,468.2 trillion in May 2020 or grew 10.4% (yoy), higher than the previous month's growth of 8.6% (yoy). The accelerated growth of M2 was caused by an increase in all its components, both narrow money (M1), quasi money, and securities other than shares.
M1 growth increased from 8.4% (yoy) in April 2020 to 9.7% (yoy) in May 2020, due to an increase in Rupiah demand deposits. In addition, quasi money growth was recorded at 10.5% (yoy) in May 2020, an increase from the previous month's growth of 8.5% (yoy). Securities other than shares also grew 37.5% (yoy) in May 2020, higher than the growth in the previous month of 20.6% (yoy).
Based on influencing factors, the increase in M2 in May 2020 was due to an increase in net foreign assets and expansion of government financial operations. Net foreign assets in May 2020 increased by 18.2% (yoy), higher than the increase in April 2020 of 15.8% (yoy).
In addition, government finances recorded an expansion in line with the increase in net bills to the Central Government, from 1.7% (yoy) in April 2020 to 11.0% (yoy) in May 2020. Meanwhile, lending in May 2020 grew 2.4% (yoy), slowing compared to the previous month's growth of 5.1% (yoy). (LM)