JAKARTA - Liquidity of economy or broad money (M2) increased in August 2020 due to the narrow money (M1) and quasi money. M2 position in August 2020 was recorded at Rp6,726.1 trillion or a 13.3% increase(yoy), or higher compared to the previous month's growth of 10.5% (yoy). 

This increase was due to M1 growth of 19.3% (yoy), higher than the growth in July 2020 of 13.1% (yoy), driven by an increase in Rupiah demand deposits. In addition, quasi money growth increased, from 9.7% (yoy) in the previous month to 11.5% (yoy) in August 2020. However, securities other than stocks contracted by 18.7% (yoy) in August 2020, after growing by 4.9% (yoy) in the previous month.

Based on the influencing factors, the increase in M2 in August 2020 was due to an increase in government financial expansion. This was reflected in the increasing growth in net claims to the Central Government, from 40.8% (yoy) in July 2020 to 65.1% (yoy) in August 2020.

In addition, net foreign assets increased by 13.8% (yoy) in August 2020, lower than the growth in July 2020 of 17.6% (yoy). Meanwhile, credit growth slowed again in August 2020, from 1.0% (yoy) in July 2020 to 0.6% (yoy) in the month under review. (LM)