If Bank Indonesia (BI) cuts three zeros in the Indonesian rupiah, the nation’s consumers would lose confidence in our currency. For many old enough to remember, it would be the sanering or slashing of the currency’s value of 1959 all over again.
If we handle the redenomination quickly, these pains can be minimized. But for the redenomination to work, BI must also expedite the redenomination to maximize the momentum gained from the potential elimination of fuel subsidy.
The Law on Rupiah Redenomination is being debated by the central bank, the Finance Ministry and the House of Representatives, and is scheduled for completion by the end of the year.
For the past several months, BI has been involved in a media campaign to promote the concept of its redenomination policy. This rigorous effort is to ensure that the launch of the ambitious program goes unhindered.