Developments in Monetary Sector 2014:Q1
Rupiah Continues to Depreciate
High inflationary pressure in Indonesia is often attributable to non-monetary factors such as poor infrastructure, floods, and natural disasters. Such events have often ended up sending prices of food prices higher, which in turn fuels inflation. Inflation in January 2014 rose sharply compared to the position in December 2013 (8.08%, y-o-y). Besides, the increase in prices of commodities that are under government direction and control—such as the increase in liquefied petroleum gas which occurred at the beginning of the year—also contributed to the drastic rise in inflation.
Developments in Monetary Sector 2013:Q4
As a consequence of weakening economic growth, the volume of money in (M2) circulation in broad sense also showed a decline. M2 growth in October 2013 slowed to 13.02% (y-o-y) from 14.57% (y-o-y) in the previous month. On the contrary, growth in M1 increased to 10.48% (y-o-y) from 9.08% (y-o-y) in the previous month.
Figure 4: Money Supply, 2011 – 2013* (in IDR Trillion)
Growth in M2 showed declined in October 2013, conversely, MI growth higher compared with the previous month. 
Source: Bank Indonesia and CEIC (2013)
*= October 2013
Developments in Monetary Sector 2013:Q3
A. Money Supply
In July 2013, the central bank recorded money supply of M1 and M2 amounted for IDR 903.23 trillion and IDR 3,529.66 trillion respectively. To that end, M1 registered an increase of 17% (yoy) in July 2013, which is higher than 10.2% recorded in the previous month. Meanwhile, M2 increased by 15.5% in July 2013 which is higher than 11.9% (yoy) in June 2013.
High growth in money supply during Ramadhan and Eid Mubarak contributed to inflation in August 2013. Based on Bank Indonesia data, the population withdrew IDR 97 trillion during July 10- August 2, 2013 , which is 94.1% of IDR 103.1 trillion predicted as money required by the population during the Eid season.