New Series of Rupiah, BI Says Don?t Hesitate

 
Fathan Qorib, Christina Desy
 
Starting 17 August 2014, Indonesia has a new series of banknotes, commonly referred to in the media as “Uang NKRI” or “NKRI Banknotes”.
 
The abbreviation NKRI stands for Negara Kesatuan Republik Indonesia (Unitary State of the Republic of Indonesia), which is written on the banknotes.
 
The phrase Negara Kesatuan Republik Indonesia replaces the phrase “Bank Indonesia”, which can be found on the old style banknotes which also remain in circulation.
 
Given there may be some hesitation towards the new notes, Agus DW Martowardojo, the Governor of Bank Indonesia (“BI”), said that the public should not have any concerns about using the money.
 
“The Rupiah is a valid payment instrument and it must be used throughout Indonesia,” said the Governor at the launch of the new edition of banknotes in Jakarta on Monday.
 
Mr. Martowardojo further explained that that there are currently 40 million NKRI Banknotes of IDR 100,000 denomination on issue. Other denominations, according to BI, will be issued gradually.
 
“Other denominations will be issued within the next three years,” said Mr. Martowardojo.
 
In regard to the replacement of the phrase “Bank Indonesia” with the “NKRI” wording, Lambok A. Siahaan, Head of the Money Management Department of BI, explained that the change was mandated under Law No. 7 of 2011 on Currency (“Currency Law”).
 
Pursuant to Article 5 (1) of the Currency Law, a banknote must satisfy several requirements before being printed and issued. This requirements include that the note must depict the Garuda symbol, be signed by the Governor of BI and the Minister of Finance, and include the “NKRI” phrase.
 
Mr. Siahaan further explained that the process for issuing the NKRI Banknote took considerable time and many parties were involved.
 
“Even the use of Soekarno and Hatta’s image required permission from the heirs and there was a Presidential Decree issued,” Mr. Siahaan said.
 
In terms of distribution, Mr. Siahaan explained that BI has circulated the IDR 100,000 NKRI Banknote to all of its branch offices throughout Indonesia. He further added that the demand or the use of the banknote by the public was calculated prior to the printing of the new rupiah series based on assumptions related to the macro-economy, and exchange and interest rates.
 
Commenting on the long process that was needed to print and issue the new banknotes, M. Chatib Basri, Minister of Finance, said that the process was necessary to ensure compliance with the Currency Law.
 
“It was started in 2006 and was only finished in 2011,” he explained.
 
Mr. Basri believes the issue of the NKRI Banknotes should act as impetus to support the Rupiah as the valid medium of exchange for any transaction made in Indonesia. As a consequence, he further asserted the urgency for a familiarization and guidance program so that businesses and the public will use Rupiah for their transactions.
 
According to Mr. Basri, such guidance is urgent, as there are some regions in Indonesia that allow the use of foreign currency instead of Rupiah for transactions. He further reiterated that the use of Rupiah for transaction made in Indonesia is mandatory unless there is an agreement regulated otherwise.
 
“It is a symbol of the Republic of Indonesia’s sovereignty to enforce the use of this banknote as well as a signifying momentum to use Rupiah as a valid payment instrument except for transactions agreed to be in other currencies," concluded Mr. Chatib.
 
(hot/kc)