Jakarta (ANTARA) – The issue of rupee redenomination has surfaced again after Finance Minister Purbaya declared the government’s intention to prepare a Rupee Price Changes (Redenomination) Bill (RUU) and targets its completion in 2027.
This step is established in the Ministry of Finance (PMK) Regulation Number 70 of 2025 relating to the Strategic Plan of the Ministry of Finance for the period 2025-2029.
In this document, the Ministry of Finance aims to prepare four priority bills, namely the Auction Bill, the State Asset Management Bill, the Rupee Price Changes (Redenomination) Bill and the Appraisers Bill.
Previously, this plan had also emerged during the leadership of Finance Minister Sri Mulyani Indrawati, but it had not come to fruition.
What is Rupee Redenomination?
Redenomination is the process of reducing the number of digits (zero numbers) in a country’s currency denomination, but it does not change the purchasing power or exchange rate of the currency itself.
For example, a unit that was registered as Rp. 1,000 can be changed to Rp. 1 after removing the three zeros, but you can still purchase goods of the same value as before.
This practice of “nominal simplification” has actually been applied indirectly in people’s lives, especially in modern shopping malls, restaurants or cinemas.
People often encounter price tags with the unit “K”, such as “30K” which means IDR 30,000. This phenomenon demonstrates that the public is accustomed to the simple nominal concept, even if it has not been officially implemented at a national level.
Besides that, in Permana’s research (Journal of Economics and Public Policy, 2015) it is stated that Indonesia’s monetary denomination is one of the largest in the world.
The Rupee is considered the third largest currency after Zimbabwe and Vietnam. For the Southeast Asia region, the IDR 100,000 denomination is the second largest after the Vietnamese Dong which has a 500,000 denomination.
The purpose of the rupee redenomination
There are several key objectives behind the consideration of rupee redenomination, including:
1. Increase the efficiency of transactions and financial systems
With a lower nominal amount, transaction processes, accounting and digital payment systems can work more quickly and efficiently. Cash calculations, financial reports and accounting systems will also be simpler and have minimal risk of errors.
2. Improve the image and credibility of the currency
It is often believed that a large rupee denomination gives the impression of a weak currency value. By implementing the redenomination, it can strengthen the perception that the Indonesian economy is increasingly mature, stable and on par with other countries that have efficient monetary systems.
3. Support financial digital transformation
In the age of digitalization, technology-based payment systems require simplicity of numbers. Redenomination can facilitate the integration of digital financial systems and facilitate the adaptation of the public and economic actors to modern financial technology.
Benefits expected from rupee redenomination
If implemented carefully and gradually, the redenomination of the rupee can also have a positive impact on the national economy, including:
1. Transactions are simpler and more efficient
A smaller denomination will make it easier for people to calculate, write or record transactions. This can also reduce administrative burdens for economic operators and financial institutions.
2. Reduce the risk of registration errors
The large number of zeros in the nominal value often causes errors, both in manual transactions and in digital systems. With nominal simplification you can significantly reduce the risk of input errors.
3. Increase the credibility of the rupee in international eyes
A Rupee with a more rational nominal value can increase positive perceptions globally, especially for foreign investors. Confidence in the stability of the rupiah currency can also strengthen Indonesia’s position in cross-border sales and investments.
4. Encourage digital payment system efficiency
In the context of digital economic transformation, simpler nominal figures can speed up data processing, reduce financial system costs and strengthen the integration of national payment systems.
Also read: Government preparing rupee redenomination bill, expected to be completed by 2027
Read also: Rupee closed higher at IDR 16,701 amid sentiment over redenomination law
Read also: Supporters of the verification of the currency law at the Constitutional Court, ask Rp. 1,000 to be simplified into Rp. 1
Reporter: Putri Atika Chairulia
Publisher: Alviansyah Pasaribu
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