Broad Money and Its Affecting Factors

Broad Money and Its Affecting Factors wa e Weaker growth of broad money (M2) remained in e. It grew 13.0, lower than 13.4 growth in. The deceleration of M2 growth was dragged by Quasi Money (Time and Saving Deposits in rupiah and foreign currency, and foreign currency Demand Deposit), which grew 13.9, slower than 15.1 in the previous month. Based on affecting factor, M2 growth was influenced by retarded expansion of Central Government financial operation and bank lending growth. Net claims on the Central Government slighter dropped from 25.6 to 25.5. Meanwhile, banking credit stood at Rp3,863.9 T or grew 10.2, milder compared to 10.3 one month earlier. Interest rates moved mixed. In e, 1-month, 3-month, and 6-month time deposit rates came down to at 7.76%, 8.27%, and 8.73%, from 7.85%, 8.50% and 8.90% in. In contrast, average lending rate slightly up from 12.96% to 12.97% in e. Graph 1. GDP, Money Supply, Deposit and Loan Growth Table 1. Money Supply '15 '15 Broad Money (M2) 4,288.4 4,359.5 13.4 13.0 Narrow Money (M1) 980.9 1,039.7 8.2 9.9 o/w: Currency Outside Commercial and Rural Banks 406.5 409.9 6.8 7.4 Quasi Money 3,293.1 3,306.2 15.1 13.9 Securities Other Than Shares 14.3 13.6 1.5 54.5 Since January 2012, BPR included BPR Syariah *Data of BPR and BPRS are as of THE COMPONENTS OF MONEY SUPPLY Money Supply (M2) 1 continued to slow down compared to the previous month. Money Supply (M2) as of the end of e was Rp4,359.5 T, or grew 13.0, slower than 13.4 growth posted in the previous month. The slowdown was mainly affected by Quasi Money 2 as the growth of time deposits (both in rupiah and foreign exchange) decelerated. Quasi Money stood at Rp3,306.2 T, or grew 13.9, slower than 15.1 in. However, augmented M1 which grew 9.9, up from 8.2 in, restrained M2 deceleration. Meanwhile, the growth of private deposits 3 in the banking system (DPK) in e was relatively stable at 13.2, the same as. This condition was due to weaker growth in Time Deposits (both in rupiah and foreign currency) amid increasing growth of Savings and Demand 1 Money supply can be defined in terms of the narrow (M1) and broad (M2) aggregates. M1 consists of currency outside banks and demand deposits (in the rupiah currency), while M2 consists of M1, quasi-money and securities issued by the monetary system and held by the domestic private sector with remaining maturities of up to one year 2 Quasi-money consists of private deposits, made up of time deposits and savings deposits (held in rupiahs and foreign currency) plus foreign currency demand deposits 3 Private deposits are deposits of third parties held in commercial banks and rural banks in demand deposits, savings deposits and time deposits in rupiahs and foreign currency. In the statistics for the money supply, private deposits do not include deposits blocked by reason of loss of their monetary function. On the other hand, in analysing their development, private deposits also include blocked deposits and deposits owned by third parties (not including deposits held by the Central Government and non-residents) in rupiahs and foreign currencies at both commercial banks and rural banks (not including bank offices operating outside Indonesian territory) in the form of demand deposits, savings deposits and time deposits. DSta Monetary and Fiscal Statistics Division 1

Table 2. Deposits Deposits Rupiah 3,426.6 3,493.5 12.3 11.3 Demand Deposit 612.7 670.6 8.2 10.0 Saving Deposit 1,114.4 1,131.3 3.2 3.6 Time Deposit 1,699.6 1,691.5 20.9 17.7 Foreign Currency 709.4 731.0 17.7 23.2 Demand Deposit 306.9 331.2 16.1 34.2 Saving Deposit 98.7 102.0 11.8 17.5 Time Deposit 303.9 297.8 21.4 14.6 Total 4,136.0 4,224.5 13.2 13.2 Demand Deposit 919.5 1,001.9 10.7 17.0 Saving Deposit 1,213.0 1,233.3 3.9 4.6 Time Deposit 2,003.5 1,989.3 20.9 17.2 Table 3. Factors Influencing the Money Supply % yoy '15 '15 Factors Affecting Broad Money 4,288.4 4,359.5 13.4 13.0 Net Foreign Assets 1,189.0 1,190.3 12.5 11.0 Net Domestic Assets 3,099.4 3,169.3 13.8 13.8 Net Claims on Central Government 365.1 408.2 25.6 25.5 Claims on Central Government 668.6 677.5 14.1 12.6 Liabilities to Central Government 303.5 269.3 2.9 (2.5) Claims on Other Sector 4,079.7 4,156.0 11.7 11.8 o/w: Loans 4 3,794.0 3,863.9 10.3 10.2 Net Other Items 47.1 27.8 110.0 16.0 Since January 2012, BPR included BPR Syariah *Data of BPR and BPRS are as of Table 4. Loans to the Manufacturing and Trade Sectors Credit % yoy Working Capital Loans 1,785.9 1,835.8 10.2 10.4 Investment Credit 932.1 936.6 11.1 10.1 o/w Manufacturing Industry 193.8 197.3 15.1 14.8 Trade, Hotel, and Restaurant 172.2 174.4 13.4 13.3 Consumer Loans 1,024.0 1,035.0 10.0 10.1 Table 5. MSME Loans by Commercial Banks yoy (%) '15 '15 Business Scale Micro 150.0 155.1 17.9 18.6 Small 198.8 203.7 4.7 4.7 Medium 345.9 352.0 8.6 8.0 Type of Loans Working Capital Loans 507.0 521.9 9.9 10.1 Invesment Loans 187.7 188.9 7.7 6.5 Total 694.7 710.9 9.3 9.2 Deposits. Time Deposits position at the end of e stood at Rp1,989.3 T, or grew 17.2% (yoy), lower than 20.9 in. Meanwhile, Demand and Savings deposits were registered at Rp1,001.9 T and Rp1,233.3 T, respectively or grew 17.0 and 4.6, increased from 10.7 and 3.9 in the previous month (Table 2). FACTORS AFFECTING BROAD MONEY The sluggish growth g of M2 was s affected by retarded expansion of Central Government financial operation and bank lending growth. Net claims on the Central Government slighter dropped from 25.6 to 25.5. Furthermore, the outstanding of bank credit 4 reached Rp3,863.9 T in e, or grew 10.2, slightly down from 10.3 one month earlier (Table 3). The credit slowdown was mainly in Investment Credit, registered at Rp936.6 T in e, or grew 10.1, lower than 11.1 in the previous month. This was on account of slowing growth of credit to the manufacturing sector and trade, hotels and restaurants sector, which grew 14.8 and 13.3 respectively, well below the 15.1% (yoy) and 13.4 in the previous month (Table 4). The sluggish credit growth was also evident in credit to Micro, Small and Medium Enterprises (MSMEs) as well as property loans. Loans extended to MSMEs in e stood at Rp710.9 T, or grew 9.2, slower than 9.3 in (Table 5). This slowdown occurred in credit 4 Credit outstanding is limited to loans and does not include equivalent financial instruments, such as debt securities, banker's acceptances and repo claims. Furthermore, credit outstanding does not include lending by overseas offices of commercial banks and loans to the central government and non-residents. DSta Monetary and Fiscal Statistics Division 2

Graph 2. Lending for r the Trade, Hotels and Restaurants Sector, Property and Manufacturing % Table 6. Property Credit Property Loans 573.4 586.0 14.6 14.1 Housing and Apartment Ownership Credits 324.8 327.7 7.7 6.9 Construction Credits 155.9 163.0 28.7 27.9 Real Estate Credits 92.6 95.3 19.5 19.3 *Data of BPR and BPRS are as of Graph 3. Developments in the BI Rate and Time Deposit and Loan Interest Rates to medium-scale enterprises which grew 8.0% (yoy), below the growth in (8.6). Meanwhile, bank lending to property sectors totaled Rp586.0 T, or grew 14.1, lower than 14.6 in. The eased growth was charted in house and apartment ownership credit, construction credit, and real estate credit, which grew 6.9, 27.9, and 19.3% (yoy) respectively, down from 7.7, 28.7% (yoy), and 19.5 in. Interest rates moved mixed. In e, 1- month, 3-month, and 6-month time deposit rates5 came down to at 7.76%, 8.27%, and 8.73%, from 7.85%, 8.50% and 8.90% in. In contrast, average lending rate slightly up from 12.96% to 12.97% in e (Chart 3). September MONETARY AND FISCAL STATISTICS DIVISION STATISTICS DEPARTMENT 5 The interest rate calculation is based only on interest rates at commercial banks and does not include rural banks. DSta Monetary and Fiscal Statistics Division 3

Appendix 1. Money Supply and Its Affecting Factors Description Jul Aug 2014 Sep Oct Nov Dec Jan Feb Mar Apr Broad Money (M2) 3,857,962 3,887,407 3,886,520 4,010,147 4,024,489 4,076,670 4,173,327 4,174,826 4,218,123 4,246,361 4,275,711 4,288,369 4,359,546 Narrow Money (M1) 945,718 918,566 895,827 949,168 940,349 955,535 942,221 918,079 927,848 957,580 959,376 980,915 1,039,680 Currency Outside Commercial and Rural Ban 381,638 452,788 399,270 395,229 396,113 405,694 419,262 391,255 387,889 382,005 395,687 406,499 409,876 Rupiah Demand Deposits 564,080 465,778 496,557 553,939 544,236 549,841 522,960 526,824 539,958 575,576 563,690 574,416 629,805 Quasi Money 2,903,415 2,959,732 2,982,674 3,044,842 3,066,421 3,099,350 3,209,475 3,233,881 3,278,945 3,275,499 3,302,204 3,293,147 3,306,223 Time Deposits 1,569,825 1,597,991 1,629,380 1,665,844 1,680,642 1,694,565 1,729,883 1,788,607 1,846,809 1,849,279 1,862,403 1,858,171 1,828,984 Rupiah 1,331,090 1,364,886 1,396,816 1,418,043 1,444,455 1,456,531 1,475,405 1,523,779 1,570,171 1,572,159 1,589,189 1,578,151 1,558,639 Foreign Currency 238,735 233,105 232,564 247,800 236,188 238,034 254,478 264,828 276,638 277,120 273,215 280,020 270,345 Savings Deposits 1,106,140 1,144,093 1,132,274 1,143,054 1,138,907 1,158,896 1,234,588 1,184,829 1,181,971 1,170,999 1,176,802 1,169,045 1,191,252 Rupiah 1,021,764 1,056,188 1,044,437 1,055,488 1,053,944 1,070,258 1,144,254 1,093,281 1,090,330 1,077,671 1,082,143 1,077,048 1,095,047 Foreign Currency 84,375 87,904 87,838 87,566 84,963 88,639 90,334 91,548 91,640 93,328 94,659 91,997 96,205 Foreign Currency Demand Deposits 227,451 217,648 221,020 235,945 246,873 245,889 245,005 260,445 250,165 255,221 262,998 265,931 285,986 Securities Other Than Shares 8,829 9,110 8,019 16,136 17,719 21,785 21,630 22,866 11,331 13,282 14,131 14,307 13,643 Factors Affecting Broad Money 3,857,962 3,887,407 3,886,520 4,010,147 4,024,489 4,076,670 4,173,327 4,174,826 4,218,123 4,246,361 4,275,711 4,288,369 4,359,546 Net Foreign Assets 1,072,451 1,051,085 1,063,301 1,114,215 1,096,264 1,102,325 1,105,783 1,194,242 1,207,650 1,189,181 1,160,777 1,189,000 1,190,279 Net Domestic Assets 2,785,511 2,836,323 2,823,219 2,895,931 2,928,225 2,974,345 3,067,544 2,980,584 3,010,473 3,057,180 3,114,934 3,099,370 3,169,267 Net Claims on Central Government 325,312 293,691 306,328 345,765 380,011 394,515 416,608 363,458 382,650 426,449 417,441 365,074 408,201 Claims on Central Government 601,524 594,724 595,991 619,313 606,097 609,096 615,763 620,220 646,659 664,938 672,755 668,612 677,513 Liabilities to Central Government 276,212 301,032 289,663 273,548 226,085 214,580 199,155 256,762 264,009 238,489 255,314 303,539 269,312 Claims on Other Sector 3,717,744 3,747,911 3,757,074 3,823,505 3,844,952 3,913,512 3,961,583 3,936,152 3,958,638 3,981,351 4,026,379 4,079,709 4,155,950 Claims on Other Financial Institutions: 236,409 240,712 238,566 239,971 240,961 249,966 252,742 248,260 257,484 256,754 260,610 259,101 260,999 Loans 181,672 182,755 180,633 183,323 181,443 185,194 189,010 183,757 187,889 183,010 183,299 183,335 186,692 Other Claims 54,737 57,957 57,934 56,648 59,518 64,773 63,732 64,504 69,594 73,744 77,311 75,767 74,307 Claims on State and Local - - - - - - - - - - - - - Government: 5,730 5,849 5,838 6,042 6,212 6,369 6,635 6,623 6,456 6,271 5,742 5,837 5,890 Loans 5,709 5,828 5,817 6,021 6,191 6,348 6,614 6,602 6,435 6,250 5,721 5,816 5,869 Other Claims 21 21 21 21 21 21 21 21 21 21 21 21 21 Claims on Public NonFinancial - - - - - - - - - - - - - Corporations: 215,948 226,807 219,927 227,825 210,234 214,330 213,528 226,573 222,760 209,221 219,394 229,741 239,222 Loans 196,715 208,146 201,622 206,055 189,986 194,531 194,380 205,738 196,956 181,023 190,607 201,745 210,765 Other Claims 19,233 18,661 18,305 21,770 20,248 19,800 19,148 20,835 25,804 28,198 28,787 27,996 28,457 Claims on Private Sectors 3,259,657 3,274,542 3,292,743 3,349,667 3,387,545 3,442,846 3,488,677 3,454,695 3,471,938 3,509,105 3,540,632 3,585,030 3,649,839 Loans 3,122,039 3,133,368 3,144,572 3,200,665 3,215,930 3,246,041 3,318,866 3,272,602 3,309,119 3,345,375 3,368,584 3,404,079 3,461,551 Other Claims 137,618 141,174 148,171 149,002 171,616 196,805 169,811 182,093 162,819 163,730 172,048 180,951 188,289 Shares and Other Equity (967,243) (944,312) (959,649) (988,486) (991,549) (1,006,376) (1,027,315) (1,060,135) (1,074,954) (1,076,710) (1,058,064) (1,071,827) (1,082,650) Net Other Items 23,921 45,636 35,632 42,576 26,032 9,999 49,733 43,774 44,390 32,309 39,581 47,107 27,759 Since January 2012 BPR included BPR Syariah In Money Supply Statistics (Appendix 1), credit extended includes Loans, Banker s Acceptances, and Repo claim. *Data of BPR and BPRS are as of Appendix 2. Private Deposits in the Banking System Deposits Jul Aug 2014 Sep Oct Nov Dec Jan Feb Mar Apr Rupiah 3,138.9 3,097.0 3,157.7 3,260.6 3,277.3 3,312.4 3,376.0 3,346.4 3,398.7 3,424.2 3,431.5 3,426.6 3,493.5 Demand Deposit 609.8 506.1 539.4 601.1 590.3 601.3 576.9 561.6 576.6 614.6 602.6 612.7 670.6 Saving Deposit 1,092.1 1,124.9 1,114.8 1,127.2 1,125.6 1,138.0 1,204.1 1,142.6 1,135.3 1,119.3 1,119.6 1,114.4 1,131.3 Time Deposit 1,437.0 1,466.0 1,503.6 1,532.3 1,561.4 1,573.0 1,595.0 1,642.2 1,686.9 1,690.3 1,709.3 1,699.6 1,691.5 Foreign Currency 593.3 584.2 587.5 615.9 613.3 621.5 637.9 663.9 669.1 681.8 694.5 709.4 731.0 Demand Deposit 246.8 241.1 244.0 256.2 269.1 271.7 268.8 283.3 275.8 286.4 301.4 306.9 331.2 Saving Deposit 86.8 90.5 90.3 90.9 88.1 91.9 94.2 94.8 95.2 96.9 98.2 98.7 102.0 Time Deposit 259.8 252.6 253.1 268.8 256.1 257.9 274.9 285.7 298.1 298.4 294.9 303.9 297.8 Total 3,732.3 3,681.2 3,745.2 3,876.5 3,890.6 3,933.9 4,013.8 4,010.2 4,067.8 4,106.0 4,126.0 4,136.0 4,224.5 Demand Deposit 856.6 747.2 783.4 857.3 859.4 873.0 845.7 844.9 852.3 901.1 904.0 919.5 1,001.9 Saving Deposit 1,178.9 1,215.4 1,205.1 1,218.1 1,213.7 1,229.9 1,298.3 1,237.4 1,230.5 1,216.2 1,217.8 1,213.0 1,233.3 Time Deposit 1,696.8 1,718.6 1,756.7 1,801.1 1,817.5 1,830.9 1,869.8 1,927.9 1,985.0 1,988.7 2,004.2 2,003.5 1,989.3 DSta Monetary and Fiscal Statistics Division 4

Appendix 3. Bank Lending to the Domestic Private Sector 2014 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Currency of Denomination Rupiah 2,963.1 2,992.7 2,988.8 3,029.0 3,037.6 3,068.9 3,126.4 3,078.3 3,105.8 3,133.5 3,161.0 3,195.9 3,257.8 Foreign Currency 542.5 536.7 543.0 566.1 555.1 562.3 581.5 589.4 593.8 581.2 586.3 598.2 606.2 Type of Loans Investment Loans 850.6 845.5 850.3 864.3 861.5 873.7 894.6 900.5 905.8 915.9 915.2 932.1 936.6 Agriculture, Livestock, Forestry & Fishery 122.5 123.6 124.7 125.2 126.0 130.2 132.2 133.0 133.1 134.3 135.5 137.9 141.1 Mining and Quarrying 39.7 38.7 40.1 42.4 41.6 40.5 46.6 47.0 48.2 46.8 47.1 49.6 48.6 Manufacturing Industry 171.8 170.7 171.8 175.9 175.3 178.8 180.8 186.6 188.8 191.3 189.4 193.8 197.3 Electricity, Gas and Water Supply 68.1 68.2 68.1 69.0 66.2 68.0 70.3 70.1 71.7 71.5 71.9 74.4 72.7 Construction 37.1 37.4 38.2 38.7 41.9 43.3 44.9 45.7 45.8 46.8 47.1 47.6 49.5 Trade, Hotel, and Restaurant 154.0 153.9 154.2 156.2 155.3 157.4 163.5 163.1 164.6 168.8 170.6 172.2 174.4 Transport and Communication 105.5 101.5 101.9 103.5 102.2 101.0 99.3 98.8 97.5 98.0 95.6 98.8 94.6 Financial, Ownership & Business Services 93.5 93.8 93.4 94.9 95.6 94.4 94.2 93.8 94.7 95.6 95.5 95.1 95.0 Services 58.4 57.6 58.1 58.6 57.3 59.9 62.8 62.4 61.6 62.7 62.7 62.6 63.3 Working Capital Loans 1,663.3 1,684.5 1,679.4 1,716.9 1,707.2 1,722.5 1,765.3 1,719.8 1,740.4 1,737.0 1,762.3 1,785.9 1,835.8 Agriculture, Livestock, Forestry & Fishery 81.7 82.9 83.8 84.8 84.9 85.5 89.7 88.0 86.3 87.3 88.3 89.3 90.5 Mining and Quarrying 73.6 80.3 85.7 88.8 81.6 85.9 92.9 93.3 86.4 77.7 83.4 84.1 89.0 Manufacturing Industry 430.3 434.9 431.9 448.6 451.7 454.5 474.2 464.4 477.0 476.3 479.3 484.4 499.3 Electricity, Gas and Water Supply 14.6 17.9 20.0 18.6 9.9 10.2 10.3 13.6 16.8 13.4 11.0 13.6 14.9 Construction 92.2 97.5 101.1 105.9 108.2 107.4 103.6 97.0 99.1 103.8 107.7 110.1 115.3 Trade, Hotel, and Restaurant 625.5 625.8 619.4 625.5 629.8 637.5 640.5 628.1 636.6 642.7 651.1 662.0 678.7 Transport and Communication 65.1 67.5 67.8 69.2 65.7 65.1 66.3 63.6 65.0 66.9 73.7 73.5 73.4 Financial, Ownership & Business Services 213.9 210.7 203.4 207.4 207.7 208.3 211.1 204.2 207.7 205.1 203.6 204.3 208.5 Services 66.4 67.0 66.3 68.2 67.6 68.2 76.7 67.4 65.6 63.7 64.1 64.6 66.3 Consumer Loans 991.7 999.4 1,002.1 1,013.9 1,024.0 1,035.0 1,048.0 1,047.5 1,053.3 1,061.9 1,069.8 1,076.0 1,091.5 Total 3,505.6 3,529.5 3,531.8 3,595.1 3,592.6 3,631.2 3,707.9 3,667.7 3,699.6 3,714.8 3,747.3 3,794.0 3,863.9 DSta Monetary and Fiscal Statistics Division 5