JAKARTA - Liquidity of money or broad money (M2) increased in December 2020 driven by the narrow money supply component (M1).
M2 position in December 2020 amounted to Rp6,900.0 trillion, a 12.4% increase (yoy), slightly higher than the previous month's growth of 12.2% (yoy). This increase was driven by M1, which grew by 18.5% (yoy), higher than the previous month's growth of 15.8% (yoy).
This was consistent with the increase in circulation of currency in the public and Rupiah demand deposits. Meanwhile, the quasi money component slowed down, from 11.1% (yoy) to 10.5% (yoy) in December 2020. Growth in securities other than stocks also contracted deeper to -10.6% (yoy) from -5. 8% (yoy) as of November 2020.
Based on the influencing factors, the increase in M2 in December 2020 was driven by net foreign assets and an increase in government financial expansion. This is reflected in the growth in net foreign assets in December 2020 of 13.6% (yoy), higher than the growth in November 2020 of 10.3% (yoy). Net claims on the Central Government also increased, from 66.5% (yoy) to 66.9% (yoy) in December 2020. Meanwhile, credit growth [1] contracted deeper to -2.7% (yoy) from - 1.7% (yoy) in November 2020. (LM)