Amount Of Money Supply As Of June 2022 Reaches IDR 7.888 Trillion, Signals Of High Inflation Getting More Real?

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) reported that the money supply in a broad sense or M2 in June 2022 was stated at IDR 7.888.6 trillion.

Head of the BI Communications Department Erwin Haryono said the book grew 10.6 percent year on year (yoy) and slowed slightly from the previous month's growth of 12.1 percent yoy.

"Economic liquidity or money supply in a broad sense (M2) in June 2022 will continue to grow positively," he said in a press statement on Friday, July 22.

According to Erwin, this development was driven by growth in the money supply in the narrow sense (M1) by 16.6 percent yoy and quasi money by 3.3 percent yoy.

"M2 growth in June 2022 is mainly influenced by the acceleration of credit distribution and developments in government finances," he said.

Erwin added that lending in June 2022 grew 10.3 percent yoy, higher than the previous month's growth of 8.7 percent yoy.

Meanwhile, net bills to the central government contracted 14.0 percent yoy, or reversed from the positive growth in May 2022 of 3.9 percent yoy.

"On the other hand, net foreign assets contracted 1.7 percent yoy, improving compared to a contraction of 2.9 percent yoy in the previous month," he said.

According to VOI records, the money supply in June 2022 was higher than in May 2022, which amounted to IDR 7.854.8 trillion.

Most recently, the Governor of Bank Indonesia Perry Warjiyo stated that the domestic inflation rate is expected to continue to move up to 4.6 percent by the end of next year. The figure was recorded as having exceeded the target set by 3 percent plus minus 1 percent.

“Indeed, the CPI (consumer price index) will rise. Until the end of this year it can reach 4.5 percent to 4.6 percent," he said in a virtual press conference after holding the BI Board of Governors Meeting (RDG) on Thursday, July 21.

As is known, the presence of more and more money in society is closely related to the inflation rate that occurs. Meanwhile, one of Bank Indonesia's efforts to keep inflation from being too wide is through tightening the statutory reserve requirement to absorb excess liquidity in the market.