BI Says The Peak Of Money Supply Occurring During Fasting And Eid

Rupiah (Photo: Doc. Antara)

JAKARTA - Bank Indonesia stated that the peak of money circulation in a one-year period occurred during Ramadan and Eid Al-Fitr.

"In the one-year money circulation cycle, the Ramadan period is the peak of money circulation, an average of 25 percent in one year," said Head of Bank Indonesia's Money Management Department (BI) Marlison Hakim, quoting Antara.

BI noted that economic liquidity or money supply in a broad sense (M2) in February 2023 reached IDR 8,300 trillion or grew 7.9 percent year on year (yoy).

This development was driven by growth in the narrow money supply (M1) of 6.6 percent yoy, and the development of net domestic assets which grew by 8.2 percent yoy.

"BI has estimated how much money will be in circulation in one year, we will estimate which period will be the peak of this money circulation," said Marlison.

In addition, he revealed that the second highest period of money circulation in one year occurred during Christmas and New Year with a percentage reaching 20 percent of the total money supply in one year.

"From the amount of money that we distribute in one year, for Christmas and New Year (Nataru) it is an average of 20 percent," said Marlison.

In order to meet people's needs for Ramadan and Eid al-Fitr in 2023, BI has prepared IDR 195 trillion in cash, to be precise for the period March 27 2023 to April 20, 2023, or an increase of 8.22 percent yoy from the realization in 2022.

BI is working with banks to provide 5,066 money exchange service points this year, or an increase of 377 points from 2022.

On this occasion, Marlison revealed that BI had realized around IDR 85 trillion or 44 percent of the IDR 195 trillion cash exchange target that had been prepared for the Ramadan and Idul Fitri periods in 2023.

"Until now, out of IDR 195 trillion, 44 percent had been realized as of Thursday (6/4), or around IDR 85 trillion. So far we haven't felt like adding more, because we project that it will still be sufficient by the time Idul Fitri approaches," said Marlison.

He is optimistic that the circulation of cash during the Ramadan and Eid al-Fitr periods in 2023 will reach 95 percent of the target, with the peak of circulation approaching the departure of travelers at the same time as the disbursement of the Eid Allowance (THR).