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Ada Pertanyaan? Hubungi Kami RED, IGAP Trisnajaya
The Government’s rupiah redenomination initiative, while ambitious in its goals to promote economic efficiency in Indonesia, will take years to implement.
During a public consultation, Wednesday (22/1), Darmin Nasution, Governor of Bank Indonesia (BI), stated that redenomination will be implemented in three stages: preparation, transition, and phasing out.
“Preparation and implementation are expected to take approximately six years,” Darmin said.
The preparation stage will establish a regulatory framework for redenomination. It will also set up a money printing scheme; reconcile infrastructure, payment technology, and information system; and promote redenomination to the public.
During the transition stage, the newly redenominated rupiah currency will gradually replace “old” rupiah. At that time, both old and new currencies will circulate in the market.
In order to prevent confusion, sellers are obliged to use dual prices indicating the price in both old and new rupiah.
Simplification of rupiah—removing three zeroes—will be accompanied by simplification of prices in order to avoid problems and to maintain the purchasing power of people.
Finally, during the phasing out stage, new rupiah will fully replace old currency. It is hoped that at that time, all transactions will be completed using redenominated rupiah.
Darmin explained that there are some concerns that may arise during the process of redenomination, such as price increase, negative response from society, or disputes.
However, with a strong regulatory framework, proper oversight and enforcement, as well as strong communication with communities, these concerns can be resolved.
The Governor of BI explained that redenomination was successfully implemented in other countries, such as Turkey, which serves as an incentive to follow through with the process in order to achieve greater economic efficiency.
Meanwhile, Agus Martowardojo, Minister of Finance, confirmed that in accordance with Law No. 7 of 2011 on Currency, the Government and BI have completed a Draft Bill on Redenomination.
“The draft has been submitted to the House of Representatives to enter the 2013 National Legislation Program. It will be discussed again at the plenary session in order to become law,” Agus concluded.
(jt/hot)
RED, IGAP Trisnajaya
The Government’s rupiah redenomination initiative, while ambitious in its goals to promote economic efficiency in Indonesia, will take years to implement.
During a public consultation, Wednesday (22/1), Darmin Nasution, Governor of Bank Indonesia (BI), stated that redenomination will be implemented in three stages: preparation, transition, and phasing out.
“Preparation and implementation are expected to take approximately six years,” Darmin said.
The preparation stage will establish a regulatory framework for redenomination. It will also set up a money printing scheme; reconcile infrastructure, payment technology, and information system; and promote redenomination to the public.
During the transition stage, the newly redenominated rupiah currency will gradually replace “old” rupiah. At that time, both old and new currencies will circulate in the market.
In order to prevent confusion, sellers are obliged to use dual prices indicating the price in both old and new rupiah.
Simplification of rupiah—removing three zeroes—will be accompanied by simplification of prices in order to avoid problems and to maintain the purchasing power of people.
Finally, during the phasing out stage, new rupiah will fully replace old currency. It is hoped that at that time, all transactions will be completed using redenominated rupiah.
Darmin explained that there are some concerns that may arise during the process of redenomination, such as price increase, negative response from society, or disputes.
However, with a strong regulatory framework, proper oversight and enforcement, as well as strong communication with communities, these concerns can be resolved.
The Governor of BI explained that redenomination was successfully implemented in other countries, such as Turkey, which serves as an incentive to follow through with the process in order to achieve greater economic efficiency.
Meanwhile, Agus Martowardojo, Minister of Finance, confirmed that in accordance with Law No. 7 of 2011 on Currency, the Government and BI have completed a Draft Bill on Redenomination.
“The draft has been submitted to the House of Representatives to enter the 2013 National Legislation Program. It will be discussed again at the plenary session in order to become law,” Agus concluded.
(jt/hot)