Indonesia's Currency Redenomination Plan: Diverging Views

Background and Current Status

The Indonesian government, through the Ministry of Finance, has included the rupiah redenomination bill in the National Legislation Program (Prolegnas) for 2025-2029, with a target completion date of 2026. Redenomination involves simplifying currency denominations without changing their real value. Bank Indonesia (BI) has confirmed that the process will be carefully planned, considering factors such as political and economic stability, as well as technical readiness ¹

Differing Perspectives on Implementation

Different government agencies have expressed varying views on the redenomination plan. Minister Airlangga Hartarto stated that the plan hasn't been discussed in detail within the Economic Coordination Ministry. In contrast, Finance Minister Purbaya Yudhi Sadewa confirmed that the bill has been included in the Ministry's strategic plan for 2025-2029. Purbaya emphasized that the implementation of redenomination is solely BI's authority and won't happen immediately. DPR members also indicated that the bill is still on the long list of Prolegnas and won't be prioritized soon ¹

Technical Considerations and Implementation Challenges

BI's Department Head of Communication, Ramdan Denny Prakoso, highlighted that the redenomination process will be conducted in stages, considering the right momentum. Key factors include political, economic, and social stability, as well as technical readiness encompassing legal, logistical, and information technology aspects. The central bank assured that the plan won't affect the purchasing power of the currency or its exchange rate against goods and services. DPR members, such as Martin Manurung, emphasized that redenomination requires multiple conditions to be met, including stable economic growth and controlled inflation ¹