Indonesia's Rupiah Redenomination Plan Gains Momentum

Background and Current Developments

The Indonesian government is moving forward with plans to redenominate the rupiah currency, a process that involves simplifying the currency's denomination without changing its real value ¹

. The Rupiah Redenomination Bill is now part of the National Legislation Program (Prolegnas) for 2025-2029, as confirmed by Bank Indonesia (BI) ¹

Source 1

https://finansial.bisnis.com/read/20251110/11/1927432/viral-wacana-menkeu-purbaya-redenominasi-rupiah-menko-airlangga-tepis-begini

. The redenomination process aims to enhance transaction efficiency, strengthen rupiah credibility, and support national payment system modernization ¹

Source 1

https://finansial.bisnis.com/read/20251110/11/1927432/viral-wacana-menkeu-purbaya-redenominasi-rupiah-menko-airlangga-tepis-begini

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Expert Opinions on Economic Impact

Economists have varying views on the potential impact of redenomination. Some experts believe that while the process might cause temporary inflationary pressures due to rounding up ²

, it could also reduce the underground economy and potential corruption by bringing more cash into the formal financial system ²

Source 2

https://finansial.bisnis.com/read/20251110/11/1927441/pro-kontra-rencana-redenominasi-rupiah-siapa-yang-diuntungkan

. Others argue that the redenomination will not significantly affect investment, as the primary concerns for investors are policy certainty and trust in the government rather than currency denomination ⁴

Source 4

https://finansial.bisnis.com/read/20251110/11/1927497/bi-pastikan-ruu-redenominasi-masuk-prolegnas-jamin-tak-ganggu-daya-beli

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Challenges and Considerations

The redenomination plan has faced challenges in the past, with previous attempts being postponed due to economic conditions and political considerations ²

. The current proposal includes a phased implementation approach, taking into account factors such as political stability, economic conditions, and technical readiness ¹

Source 1

https://finansial.bisnis.com/read/20251110/11/1927432/viral-wacana-menkeu-purbaya-redenominasi-rupiah-menko-airlangga-tepis-begini

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Government Coordination and Next Steps

The Ministry of Finance, led by Minister Purbaya Yudhi Sadewa, is spearheading the effort, with the Directorate General of Treasury being the main coordinator for drafting the bill ³

. The government aims to complete the bill by 2026 or 2027 ³

Source 3

https://nasional.kontan.co.id/news/redenominasi-rupiah-dinilai-tak-berdampak-signifikan-pada-investasi

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