Indonesia’s financial system continues to expand. Bank Indonesia reported that broad money supply (M2) grew by double digits at the start of 2026. This growth reflects strong liquidity, resilient banking activity, and steady demand for credit across the economy.
Key Facts & Background
M2 Growth: Broad money supply (M2) reached Rp10,117.8 trillion in January 2026, marking a 10 percent year-on-year increase.
Components of M2:
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- Currency in circulation and demand deposits showed steady growth.
- Quasi-money instruments such as savings deposits and time deposits contributed significantly to expansion.
Drivers of Growth:
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- Credit expansion by banks supported higher liquidity.
- Government spending and fiscal operations added to money supply.
- Foreign capital inflows strengthened reserves and monetary stability.
Bank Indonesia’s Role: The central bank maintained policies to ensure adequate liquidity while keeping inflation within target.
Economic Context:
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- Indonesia’s economy grew above 5 percent in 2025, supported by household consumption and investment.
- Inflation remained stable, reinforcing confidence in monetary management.
Financial Stability: The increase in M2 reflects a healthy balance between monetary expansion and controlled inflation, ensuring stability in the banking sector.
Strategic Insights
The 10 percent growth in Indonesia’s M2 money supply in January 2026 highlights the strength of domestic liquidity and the resilience of the financial system. Rising deposits and credit expansion indicate confidence among households and businesses, while stable inflation shows that monetary growth remains well-managed. For policymakers, the challenge is to sustain this balance—supporting economic activity without triggering excessive inflation or asset bubbles. The expansion of M2 also underscores Indonesia’s ability to attract capital and maintain fiscal discipline, positioning the country for continued growth.