Bank Indonesia assures base money growth remains in double digits

Bank Indonesia (BI) has said it continues to ensure that base money (M0) remains growing at a double-digit level.

“Monetary policy will continue to maintain stability, but of course still encourage economic growth through our other instruments, namely related to M0 which will continue to be ensured to grow in double digits. In fact, in July it has already grown 18.3 percent,” said BI Deputy Governor Aida S Budiman at a press conference following the BI Board of Governors Meeting in Jakarta on Wednesday.

BI reported that M0 grew 18.3 percent year-on-year (yoy) in July 2026.

By component, M0 growth in July was mainly influenced by commercial banks’ current accounts at Bank Indonesia, which grew 22.4 percent (yoy), and currency in circulation, which grew 15.1 percent (yoy).

“In terms of influencing factors, M0 growth in July 2026 was influenced by Bank Indonesia’s monetary operations and the expansion of the Government’s financial operations,” said Acting Governor of Bank Indonesia Destry Damayanti.

In line with this, broad money (M2) in June 2026 grew 8.7 percent (yoy).

By influencing factor, M2 growth was mainly driven by credit disbursement and net claims on the Central Government.

“Going forward, various strengthening efforts to maintain adequate liquidity in the money market, banking sector, and the economy will continue to be pursued so as to maintain stability and support economic growth,” said Destry.

Destry also conveyed that banking intermediation continues to rise, supported by maintained banking resilience.

Banking credit in July 2026 grew 13.58 percent (yoy), up from growth of 12.67 percent (yoy) in June 2026.

This positive development was supported by the loose macroprudential policy that continues to be pursued through the optimisation of the Macroprudential Liquidity Incentive (KLM) Policy to encourage increased bank credit/financing to priority sectors.

As of the first week of August 2026, KLM incentives obtained by banks were recorded at Rp446.5 trillion, with allocations of Rp368.4 trillion through the financing channel, Rp73.2 trillion through the interest rate channel, and Rp4.9 trillion through the financing-to-funding channel.