Indonesia: Broad Money Developments (M2) - April 2022

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1. Broad Money (M2) and Affecting Factors April 2022 Money Supply Growth Accelerated in April 2022  Broad money (M2) growth, as a measure of liquidity in the economy, accelerated in April 2022 . Totalling Rp7,911.3 trillion, M2 growth increased to 13.6% (yoy) in the reporting period from 13.3% (yoy) in March 2022, supported by narrow money (M11) at 20.8% (yoy) and securities other than shares at 59.3% (yoy).  Based on the affecting factors, the ongoing acceleration of disbursed loans contributed to faster M2 growth in April 2022. Loans2 disbursed by the banking industry grew 8.8% (yoy) in April 2022, up from 6.4% (yoy) one month earlier. On the other hand, fiscal expansion moderated in line with net claims on central government, which decelerated from 27.9% (yoy) in March 2022 to 22.3% (yoy) in the reporting period. Meanwhile, Net Foreign Assets (NFA) recorded a deeper 4.4% (yoy) contraction in April 2022 after declining 1.5% (yoy) in March 2022. COMPONENTS OF MONEY SUPPLY Graph 1. Growth of GDP, M2, Deposits and Loans (yoy) Broad money (M2) growth accelerated in April % % 16 8 GDP (RHS) 14 M2 Loans Deposits 6 12 10 4 8 6 4 2022. Totalling Rp7,911.3 trillion, M2 growth increased to 13.6% (yoy) from 13.3% (yoy) in March 2 2022, boosted by M1 and securities other than 0 shares. M11 expanded 20.8% (yoy) in the reporting -2 period, up from 18.7% (yoy) in March 2022, -4 primarily due to Currency Outside Banks (COB) and -6 rupiah savings deposits that can be withdrawn at any 2 0 -2 -4 -6 % (yoy) time. COB growth hit 22.3% (yoy) in April 2022 to reach a level of Rp896.3 trillion from 14.4% (yoy) in the previous period in line with increased public activities commencing the long holiday of the Eid-ulFitr festive period 1443H. Accounting for 48.5% of total M1 with a value of Rp2,191.2 trillion in the reporting period, rupiah savings deposits that can be withdrawn at any time increased 15.9% (yoy) from 14.0% (yoy) in March 2022. 1 2 In contrast, rupiah Since the September 2021 position, M1 comprises currency outside banks (COB), rupiah demand deposits and transferable rupiah savings deposits. Further explanation concerning the recent reclassification is available in Broad Money and Affecting Factors, August 2021. Disbursed loans are limited to loans and exclude loandisbursed loans also exclude loans disbursed by offshore branches of locally incorporated commercial banks as well as loans allocated to the central government and non-residents. DSta |Divisi Statistik Moneter dan Fiskal 1
2. demand deposits experienced moderation from Table 1 . Money Supply and Components (Rp, trillions) 28.8% (yoy) in March 2022 to 28.0% (yoy) in April 2022. On the other hand, the float of electronic money expanded 85.2% (yoy) to reach Rp14.2 trillion from 82.3% (yoy) the month earlier, equivalent to 0.3% of total M1. Securities other than shares3 grew 59.3% (yoy) in April 2022 to reach 0.4% of total M2 due to Notes: *Preliminary figures 3) footnote 3 acceptances against the domestic private sector, certificates of deposit as well as bonds with maturities of less than one year. Graph 2. Narrow Money (M1) Growth (yoy) % 40 With a share of 42.5% of total M2, quasi-money M1 Rupiah Demand Deposit Currency Outside Monetary System Rupiah Saving Deposits that can be withdrawn at any time 30 totalled Rp3,364.8 trillion in April 2022, as growth moderated to 5.0% (yoy) from 6.9% (yoy), primarily caused by other time deposits (1.5% yoy) and 20 foreign currency demand deposits (17.2% yoy). Growth of time deposits moderated in response to 10 lower lending rates, contrasting other savings 0 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 deposits that accelerated to 22.8% (yoy) (Table 1). -10 Table 2. Factors Affecting Money Supply (Rp, trillions) DETERMINANTS OF MONEY SUPPLY Based on the affecting factors, the ongoing acceleration of disbursed loans contributed to faster M2 growth in April 2022. Loans disbursed4 by the banking industry grew 8.8% (yoy) in April 2022, up from 6.4% (yoy) one month earlier in response to productive and consumptive loan disbursements. On the other hand, slower fiscal expansion and Net Notes: *Preliminary Figures Foreign Assets (NFA) negated further M2 gains. 3 Securities other than shares issued by banks and held by the domestic private sector include certificates of deposit and bonds with maturities of up to one a refinement of reporting details, as of January 2022, sharia certificates of deposit issued by sharia banks and the sharia business units of commercial banks are also taken into account. 4 Disbursed loans are limited to loans and exclude loandisbursed loans also exclude loans disbursed by offshore branches of locally incorporated commercial banks as well as loans allocated to the central government and non-residents. DSta |Divisi Statistik Moneter dan Fiskal 2
3. Table 3 . Deposits by Currency (Rp, trillions) Fiscal expansion moderated in line with net claims on central government, which decelerated from 27.9% (yoy) in March 2022 to 22.3% (yoy) in the reporting period. This was caused by slower growth of monetary system claims on government securities and an increase of liabilities to the central government in the form of deposit instruments. Similarly, NFA recorded a deeper 4.4% (yoy) contraction in April 2022 after declining 1.5% (yoy) in March 2022 in line with international reserve developments. Notes: *Preliminary Figures Table 4. Deposits by Customer (Rp, trillions) DEPOSITS The banking industry reported deposits totalling Rp7,242.8 trillion in April 2022, as growth decelerated slightly to 10.3% (yoy) from 10.4% (yoy) one month earlier (Table 3). Slower deposit growth was primarily attributable to demand deposits and time deposits. Based on customer segment, individual customers contributed to the downshift recorded in demand deposits and corporate customers contributed to slower growth of time deposits (Table 4). Notes: *Preliminary Figures **Other sectors including local government, cooperatives, social foundations, and other private sectors In April 2022, time deposits moderated to 0.8% (yoy) from 1.3% (yoy) the month earlier, primarily at banks located in Jakarta and West Java, while Graph 3. Deposit Growth (yoy) demand deposit growth retreated to 18.6% (yoy) from 20.2% (yoy), mainly at banks in Central Java and East Java. On the other hand, the banking industry confirmed faster 15.8% (yoy) growth of savings deposits in the reporting period compared with 14.0% (yoy) in March 2022, affecting rupiah and foreign currency savings instruments. DSta |Divisi Statistik Moneter dan Fiskal 3
4. LOANS5 Table 5 . Loans by Borrower (Rp, trillions) Loans disbursed by the banking industry maintained a positive trend in April 2022. Totalling Rp5,969.1 trillion in the reporting period, growth of disbursed loans accelerated to 8.8% (yoy) from 6.4% (yoy) in March 2022, buoyed by corporate and individual borrowers. Loans extended Notes: *Preliminary Figures **Other Borrowers including local government, cooperatives, social foundations, and other private sectors to individual customers grew 8.9% (yoy) in April 2022, up from 8.4% (yoy) in March 2022, while loans allocated to corporate customers increased to 10.3% (yoy) from 5.9% (yoy) (Table 5). Table 6. Loan Growth by Type (Rp, trillions) Maintaining momentum from the previous period, broad-based gains were reported by the banking industry across all loan types in April 2022 (Graph 4). Working capital loans posted faster 11.4% (yoy) growth in the reporting period compared with 7.4% (yoy) one month earlier, dominated by the trade, accommodation and food services sector as well as the manufacturing industry. Working capital loans Notes: *Preliminary Figures allocated to the trade, accommodation and food services sector expanded 7.5% (yoy) in April 2022 from 5.8% (yoy) in March 2022, primarily for the retail sale of food, beverages and tobacco subsector Graph 4. Loan Growth (yoy) in Jakarta and West Java. Meanwhile, growth of working capital loans disbursed to the manufacturing industry sector increased significantly to 12.6% (yoy) from 8.0% (yoy), mainly driven by the manufacture of cooking oil from crude palm oil (CPO) subsector in North Sumatra and Lampung. The banking industry also reported stronger 7.2% (yoy) growth of investment loans in April 2022 compared with 5.0% (yoy) in March 2022, primarily disbursed to the agricultural, livestock, forestry and fishing sector as well as the manufacturing industry. 5 Disbursed loans are limited to loans and exclude loanition, disbursed loans also exclude loans disbursed by offshore branches of locally incorporated commercial banks as well as loans allocated to the central government and non-residents. DSta |Divisi Statistik Moneter dan Fiskal 4
5. Investment loans extended to the agricultural , Table 7. Property Loans (Rp, trillions) livestock, forestry and fishing sector accelerated to 5.3% (yoy) in the reporting period from 3.6% (yoy) in March 2022, mainly allocated to palm oil plantations located in West Kalimantan and East Kalimantan. Notes: *Preliminary Figure Furthermore, investment loans disbursed to the manufacturing industry in April 2022 expanded 7.5% (yoy), up from 4.9% (yoy) one month earlier, predominantly targeting the manufacture of cooking oil from coconut in East Java Graph 5. Property Loan Growth (yoy) and North Sumatra. Consistent with the productive sector, consumer loan growth also improved from 6.0% (yoy) in March 2022 to 6.4% (yoy) in April 2022, edged up by disbursements of automotive loans and multipurpose loans (Table 6). In line with total credit growth, bank lending to the property sector in April 2022 accelerated to 6.1% (yoy) from 5.9% (yoy) in the previous period, primarily driven by construction loans (Table 7). After contracting 0.1% (yoy) in March 2022, construction loans reversed direction to expand 0.5% (yoy) in April 2022, mainly for the construction of toll-road sections in West Java. Conversely, Table 8. Micro, Small and Medium Enterprise (MSME) Loans (Rp, trillions) housing loans moderated slightly from 10.6% (yoy) to 10.5% (yoy) in the reporting period, dominated by the purchase of residential property measuring 22-70m². Likewise, growth of real estate loans retreated to 4.3% (yoy) from 4.6% (yoy) in the reporting period disbursements of in real line with estate increasing loans for flats/apartments. Notes: *Preliminary Figures The banking industry reported faster MSME loan growth in April 2022 at 16.9% (yoy) from 15.0% (yoy) in March 2022, predominantly in terms of loans for micro enterprises (Table 8). MSME loans extended to micro enterprises accelerated to DSta |Divisi Statistik Moneter dan Fiskal 5
6. 105 .4% (yoy) in April 2022 from 94.7% (yoy) in the Graph 6. BI 7-Day (Reverse) Repo Rate, Time Deposit Rate and Lending Rate (yoy) previous period. Meanwhile, MSME loans disbursed to medium enterprises experienced a shallower 27.9% (yoy) contraction in April 2022 after declining 28.6% (yoy) in March 2022. In contrast, MSME loans allocated to small enterprises moderated to 24.7% (yoy) in the reporting period. By loan type, stronger MSME loan growth in April 2022 stemmed from investment loans and working capital loans. DEPOSIT AND LENDING RATES Lower deposit and lending rates were recorded in April 2022 compared with conditions one month earlier. In April 2022, the weighted average lending rate fell 10 basis points to 9.01% from 9.11% in the previous period. Tracking a similar trend, the weighted average time deposit rate experienced broad declines across nearly all tenors, with 1-month, 3-month, 6-month and 12-month tenors decreasing respectively from 2.85%, 3.02%, 3.27% and 3.42% in March 2022 to 2.83%, 2.99%, 3.25% and 3.36% in April 2022. In contrast, the weighted average deposit rate for 24-month tenors increased to 4.10% in the reporting period (Graph 6). DSta |Divisi Statistik Moneter dan Fiskal 6
7. Appendix 1 . Money Supply and its Affecting Factors (Rp, trillions) Notes: Since January 2012, BPR data has included Sharia BPR Since 2021, rupiah saving deposits that can be withdrawn at any time is reclassified from quasi money to narrow money, due to its highly liquid nature. Since January 2022, commercial bank data is sourced from the Integrated Commercial Bank Report. * Preliminary Figures DSta |Divisi Statistik Moneter dan Fiskal 7
8. Appendix 2 . Money Supply Growth and its Affecting Factors (%, yoy) Note Since January 2012, BPR data has included Sharia BPR *Preliminary Figures Appendix 3. Third Party Deposits in the Banking System (Rp, trillions) Notes: Deposit coverage in the table above including blocked savings and third party savings (excluding central government saving non-resident), in Rupiah and Foreign Currency, General Bank and BPR (excluding branch offices outside of Indonesia) in the form of Giro, Savings and Time Deposit. *Preliminary Figures DSta |Divisi Statistik Moneter dan Fiskal 8
9. Appendix 4 . Bank Lending to the Domestic Private Sector (Rp, trillions) Notes: *Preliminary Figures Appendix 5. Bank Lending to the Domestic Private Sector (%, yoy) Notes: *Preliminary Figures DSta |Divisi Statistik Moneter dan Fiskal 9