The government’s proposal to simplify the Rupiah’s denomination, commonly known as redenomination, has captured significant public attention. This plan involves truncating three zeros from the currency’s face value, for instance, transforming Rp 1,000 into Rp 1 and Rp 20,000 into Rp 20.
Addressing public interest, Minister of Finance Purbaya Yudhi Sadewa affirmed that the Rupiah redenomination plan falls under the exclusive authority of Bank Indonesia (BI), the nation’s central bank. “This is a central bank policy. They will implement it when appropriate, according to their needs, but certainly not at present,” Purbaya stated after delivering a public lecture at Universitas Airlangga’s Campus C in Surabaya on Monday, November 10. When questioned about the possibility of the Rupiah redenomination policy being realized next year, the former Head of the Deposit Insurance Agency (LPS) Board of Commissioners unequivocally confirmed that it would not happen in the near future. He light-heartedly added, “No, not next year. I don’t know, that’s not the Minister of Finance’s business; it’s the central bank’s. The central bank has already made a statement, haven’t they? So, please don’t keep hitting me with these questions.”
For clarification, redenomination is a strategic policy designed to simplify the administrative handling of the Rupiah’s nominal value. Fundamentally, it serves as a crucial step towards aligning the Rupiah’s value with major foreign currencies.
Reinforcing this, Bank Indonesia (BI) also announced that the Draft Law (RUU) concerning Rupiah Redenomination has been officially included in the National Legislation Program (Prolegnas) for the Medium Term 2025-2029. “Currently, the Redenomination Bill has been listed in the Medium-Term National Legislation Program for 2025-2029, presented as a government initiative based on Bank Indonesia’s proposal,” explained Ramdan Denny Prakoso, Head of BI’s Communication Department, also on Monday, November 10.
Denny highlighted that the redenomination process is being meticulously planned and requires close coordination among all relevant stakeholders. Beyond merely aligning the Rupiah’s value with foreign currencies, this measure aims to significantly boost transaction efficiency, bolster the Rupiah’s credibility, and support the modernization of the national payment system. He further clarified, “Rupiah redenomination is essentially the simplification of the number of digits on Rupiah denominations without diminishing its purchasing power or its value against goods and/or services.”
Bank Indonesia, in collaboration with the government and the House of Representatives (DPR), will continue to deliberate on the various stages of redenomination. The central bank assures that the implementation will thoroughly consider a wide range of factors, from economic and political stability to social readiness. “The implementation of redenomination will always take into account the opportune timing, considering political, economic, and social stability, as well as technical readiness, including legal frameworks, logistics, and information technology,” Denny concluded.
