According to an article published by the Jakarta Post, the Indonesia’s Central Bank – Bank Indonesia – plans to change the denomination structure of their banknotes by removing three zeros from the Indonesian currency.
The plans for the Redenomination Bill are being discussed by the House of Representatives, the government and the Central Bank, with particular importance being placed on efforts to stop the value of the local currency being reduced.
Details of the plans were discussed by BI Governor Agus Martowardojo during his recent keynote speech at the official launch of the 2014 issue of the Rp. 100,000 banknote.
“The discussion is still ongoing and if approved [by lawmakers], there will be a transitional period of at least six years,”
The Governor made assurances that a currency redenomination would be different from historical currency remediation, “an economic policy normally implemented in a period of hyperinflation when a cut in currency value would also curb the people’s purchasing power.” Governor Agus Martowardojo explained that a redenomination in currency would also be followed by an adjustment in prices for goods and services in line with the elimination of the currency’s zeros.
“We have seen the example of Turkey that has implemented a successful example of a redenomination policy and now has a stronger sovereign currency,”
The Rp. 100,000 banknote is among the currencies with the most zeroes in the region.
Source: The Jakarta Post
