Indonesia's Monetary Base Growth Slows as Liquidity Remains Ample

Monetary Base Dynamics in October 2025

Indonesia's monetary base (M0 adjusted) growth moderated to 14.44% year-on-year in October 2025, reaching Rp2,117.6 trillion ¹

. This represents a slowdown from the 18.6% growth recorded in September 2025 when the monetary base reached Rp2,152.4 trillion ¹

Source 1

https://finansial.bisnis.com/read/20251109/11/1927347/pertumbuhan-uang-primer-oktober-2025-melambat-likuiditas-masih-aman

. The decrease in growth rate was influenced by several factors, including the normalization of commercial banks' deposits at Bank Indonesia, which grew at a slower rate of 10.49% year-on-year compared to 28% year-on-year in September 2025 ²

Source 2

https://finansial.bisnis.com/read/20251109/11/1927345/ini-alasan-uang-primer-tumbuh-melambat-pada-oktober-2025

.

Factors Influencing Monetary Base Growth

The moderation in monetary base growth can be attributed to several key factors:

1. Commercial Bank Deposits: The growth of commercial banks' deposits at BI slowed significantly to 10.49% year-on-year in October 2025 from 28% year-on-year in September 2025 ²
   Source 2

   https://finansial.bisnis.com/read/20251109/11/1927345/ini-alasan-uang-primer-tumbuh-melambat-pada-oktober-2025
   .
2. Net Foreign Assets (NFA): NFA growth moderated to 8.91% year-on-year in October 2025, down from 13.35% year-on-year in September 2025. This was influenced by moderating foreign exchange inflows and adjustments in foreign exchange reserves due to global volatility ¹
   Source 1

   https://finansial.bisnis.com/read/20251109/11/1927347/pertumbuhan-uang-primer-oktober-2025-melambat-likuiditas-masih-aman
   .
3. Adjusted Monetary Control: The adjusted monetary control component showed significant growth of 17.65% year-on-year, reflecting BI's expansive liquidity operations to maintain financial market stability ¹
   Source 1

   https://finansial.bisnis.com/read/20251109/11/1927347/pertumbuhan-uang-primer-oktober-2025-melambat-likuiditas-masih-aman
   .

Economic Implications and Future Outlook

Despite the moderation in monetary base growth, economists remain optimistic about liquidity conditions through year-end. Andry Asmoro, Chief Economist at PT Bank Mandiri (Persero) Tbk, noted that liquidity is expected to remain ample, supported by corporate excess liquidity and government spending ¹

.

The ample liquidity conditions are likely to have several positive effects on the economy:

1. Lower Funding Costs: Potential decrease in banks' cost of funds
2. Credit Growth: Accelerated credit disbursement in the remaining months of 2025
3. Economic Support: Continued support for domestic economic recovery

Bank Indonesia's Policy Considerations

BI is expected to maintain its adaptive liquidity strategy while navigating global uncertainties. The central bank is likely to balance between maintaining liquidity and ensuring exchange rate stability. Additional measures, such as the macroprudential liquidity incentive (KLM) of up to 0.5% for banks that lower lending rates effective December 1, 2025, are expected to influence minimum reserve requirements ¹

.