Indonesia Advances Currency Redenomination Plans

Legislative Progress and Implementation Timeline

The Indonesian government is making significant progress in its plans to redenominate the rupiah, with the proposed legislation now included in the Prolegnas Jangka Menengah 2025-2029 ¹

. Finance Minister Purbaya Yudhi Sadewa confirmed that while the draft law is part of the legislative plan, the Ministry of Finance is not the primary authority for this initiative.

Roles and Responsibilities in Redenomination Process

Bank Indonesia (BI) will play a crucial role in implementing the redenomination, working closely with the DPR ¹

. The central bank's governor, Perry Warjiyo, emphasized that BI is currently focused on maintaining economic stability and growth, indicating that redenomination is not an immediate priority.

Implementation Challenges and Transition Period

Chairman of DPR's Commission XI, Mukhamad Misbakhun, outlined that the redenomination process will involve multiple stages, including a lengthy transition period typically lasting three years ¹

. This includes a year for socialization, a year for transition, and the final year for implementation. The process will require amendments to existing laws, including Law No. 7/2011 on Currency and Law No. 24/1999 on Foreign Exchange Traffic and Exchange Rate System.

Economic Implications and Future Prospects

The redenomination is expected to simplify financial transactions by potentially changing the face value of the currency (e.g., from Rp1,000 to Rp1). The final decision on implementing redenomination rests with President Prabowo Subianto. While the legislative process is underway, BI remains focused on its current monetary policy priorities.