rupiah redenomination will not reduce currency value

Bank Indonesia has refloated plans for redenomination, with central bank Governor Agus Martowardojo saying the macroeconomic condition is currently stable and healthy enough to support the shift.

According to the current plan, Bank Indonesia will cut the last three zeroes from the rupiah, making Rp.1,000 instead Rp.1 and so on. The central bank reassures that this will not affect the value of cash.

“This year would be a fitting moment for re-denomination. Compared to 2016, we have been through economic recovery this year,” Martowardojo said, as quoted by Detik.

Martowardojo also said that Bank Indonesia had submitted a regulation on re-denomination two years ago to the National Legislation Programme. The bill has not been revisited in that time while the bank prioritises urgent regulations and laws on state revenue.

“Re-denomination will positively affect Indonesia’s economic reputation and will make the currency circulation more efficient. The bill only consists of 18 articles and we hope that the authorities will put a consideration on it,” Martowardojo said.