Money Supply Growth Slowed in July 2021

Bank Indonesia (BI) recorded broad money supply (M2) at Rp 7,149.2 trillion in July 2021. This figure represents an 8.9% year-on-year (yoy) increase compared to July 2020.

However, the growth of M2 money supply last month slowed compared to June 2021. M2 money supply grew by 11.4% (yoy) to Rp 7,119.6 trillion in June 2021.

This slowdown occurred due to the decelerated growth of narrow money (M1) and quasi money. M1 money supply grew by 8.9% (yoy), lower than the 17% increase in June 2021. Furthermore, the growth of quasi money slowed from 9.6% (yoy) in June 2021 to 6.8% (yoy).

Meanwhile, securities other than shares still experienced a contraction of 9.1%, reaching Rp 17.1 trillion in July 2021. However, this contraction was lower than the 21.5% contraction in June 2021.

Based on the influencing factors, the growth of M2 money supply in July 2021 was primarily driven by net foreign assets and credit disbursement. Net foreign assets grew by 4.3% (yoy) in July 2021, slower than the 11.5% growth in June 2020. Credit disbursement grew by 0.3% (yoy) last month, slower than the 0.4% growth in June 2021.