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VIRAL INDONESIAN RUPIAH 1 ( ONE ) DENOMINATIONS. IS IT A REVALUATION OR REDENOMINATION?


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                   Pros and Cons of Rupiah Redenomination during a Pandemic

 

 

19 Jul 2020 10: 40: 051887

 

 

www.nusabali.com-pro-dan-kontra-redenominasi-rupiah-di-kala-pandemi

 

 

The Ministry of Finance of the Republic of Indonesia plans to simplify the value of the rupiah or redenomination in the Minister of Finance Regulation (PMK) Number 77 / PMK.01 / 2020 concerning the Strategic Plan of the Ministry of Finance 2020-2024. The Bill on Changes in Rupiah Prices (Draft Redenomination) is stipulated in the Mid-Term National Legislation Program (Prolegnas) 2020-2024.

 

The plan to reduce the digits in the rupiah nominal value had actually been proposed by Bank Indonesia in 2010, however due to the political stability and the fluctuation of the rupiah value this step was still postponed until now. Nevertheless, the potential for redenomination seems to be optimistic again in line with the increase in Indonesia's economic status to become an upper middle income country determined by the World Bank since July 1, 2020. What is the relevance of this in a pandemic situation?

 

Redenomination in KBBI is defined as a simplification of the value of currency in this context the rupiah without changing the exchange rate. Redenomination is different from sanering or cutting (value) money. Senering was done by Indonesia in 1959, as quoted from Kompas.com. At that time, the denominations of 800 rupiah and 10,000 rupiah were reduced in value to the denominations of 80 rupiah and 1,000 rupiah, respectively. Redenomination is needed to simplify money whose value is continuously being eroded by inflation. Redenomination is different from sanering. Sanering means reducing the value of the currency, while redenomination only simplifies the nominal and the value does not decrease. Redenomination takes a long time, starting from the socialization stage to replacing old money with new ones. The correct understanding of redenomination must continue to be echoed so as not to trigger public confusion in transactions that are potentially fatal to economic stability if not managed properly.

 

The implementation of the rupiah redenomination not only makes the rupiah appear manly compared to the currencies of other countries but also the efficiency of economic transactions. In addition, reducing the number of digits in the nominal currency is alleged to be able to suppress the inflation rate, which has the potential to continue to rise if the stability of the national economy is not controlled carefully. The recording of trade transactions has become simpler due to the reduction of the zero figure in the rupiah which is also one of the positive impacts targeted by the redenomination. The chairman of the Indonesian Employers' Association for Public Policy even stated that redenomination will psychologically affect people to spend more, especially in the context of domestic trade, as quoted from Jpnn.com. As a result, demand in the industrial sector also increased and provided a positive climate for the Indonesian economy. Departing from this optimism and as an effort to move the wheels of the national economy, the redenomination option has emerged as an alternative that may be quite promising on the condition that stability and a positive domestic economic climate are achieved.

 

The pandemic period demands the government's focus on the National Economic Recovery (PEN). In the near future, several regions in Indonesia will also hold democratic parties for regional head elections in 270 regions. This means that the political climate is also likely to fluctuate in difficult times of the pandemic if it is not handled with various early anticipations. In the short term, the national economic performance target is stability. Based on data from the Central Bureau of Statistics, the inflation rate for the last five years has been quite controlled at below 4 percent. In June 2020 inflation was recorded at 0.18 percent and an estimated cumulative annual inflation of 1.09 percent. In addition, economic growth is also relatively stable, where since 2017 it has always grown above 5 percent. However, after the pandemic, the threat of a recession seems clear to be waiting due to global economic shocks that have paralyzed the wheels of the economy and supply chain in various sectors. In terms of exchange rate fluctuations, the rupiah moved relatively stable in January and February 2020, reaching an average of 13,732 rupiah and 13,776 rupiah per US dollar, respectively, and then began to depreciate in March 2020 in line with the pandemic of the spread of Covid-19. This situation also has the potential to cause Indonesia to experience a recession following Singapore, which earlier officially announced economic growth of minus 41.2 percent in the second quarter of 2020. The Indonesian economy reportedly contracted in the first quarter by growing by 2.97 percent when compared to the previous quarter. the same in the previous year. If this contraction continues in the following quarter, it is clear that the impact of a recession cannot be avoided by the Indonesian economy.

 

It seems that the pandemic situation is no longer the right momentum for redenomination. The time period 2020-2024, the Indonesian government will focus on efforts to recover the economy in the short term so that redenomination is not appropriate. Some of the bad experiences of redenomination that have been experienced by other countries can serve as a guide when the policy should be feasible enough to be implemented. The Brazilian currency has depreciated heavily against the US dollar after redenomination during times of bad domestic economic conditions and turbulent political situations. In addition, inflation in Brazil was recorded to have increased sharply by up to 500 percent per year. The dark history of redenomination has also approached the North Korean government. The lack of socialization about the change in the value of 100 won to 1 won triggered public panic, causing demand for new money to soar until stocks run out. Redenomination failure due to limited socialization also occurred in Russia. Thus, steps to carry out redenomination should be postponed until the Indonesian economy returns to stability after successfully breaking out of the trap of the global Covid-19 pandemic.

 

In the end, the rupiah redenomination policy is a decision that can have positive or negative consequences for the Indonesian economy. This plan should be postponed as a plan in the medium term given the unstable domestic and global economic conditions. In addition to readiness in proper economic and political stability, redenomination measures require the declaration of the right time so that its implementation can be of optimal benefit, not fatal consequences. It is time for us to focus on making the economy recover before rushing off to a more efficient economy with redenominations. Indonesia, you can!

 

link  :  https://www.nusabali.com/berita/77648/pro-dan-kontra-redenominasi-rupiah-di-kala-pandemi

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                          Rupiah Redenomination: What, Why, and Its Impact

 

Updated: 8 Jul 2020 22:36

 

FINAL-END, the discussion on the redenomination of the rupiah has strengthened again after the Minister of Finance Sri Mulyani announced the Minister of Finance Regulation (PMK) Number 77 / PMK.01 / 2020 concerning the Strategic Plan of the Ministry of Finance for 2020-2024, one of which includes the Rupiah redenomination plan.

 

In fact, the Draft Law on Changes to the Rupiah Price (Rupiah Redenomination) has been around for a long time, only it has not been passed into law and has not been included in the National Legislation Program (Prolegnas).

 

Actually, the issue of the redenomination of the rupiah has been discussed for a long time. As I recall, it was 2009-2013, during the time of Darmin Nasution as Governor of BI

 

The main concern of the public regarding this rupiah redenomination policy is that they equate this policy with cutting the value of money or sanering, as was done by the government in 1965. At that time there was high inflation so that the government 'cut' money from IDR 1,000 to IDR 1.

 

But there is actually a fundamental difference between sanering and redenomination. In the sanering policy, the nominal value of the rupiah currency is simplified but prices are fixed. It is not wrong if there is an assumption that sanering policies have the effect of "impoverishing" those whose wealth is mostly in the form of cash.

 

On the other hand, under the redenomination policy, the nominal value of the rupiah was simplified (according to the plan the 3 zeros in the back were removed, so the old Rp. 1,000 would later become Rp. 1 new money) but it was also followed by simplification of prices.

 

Reason
As stated in the Rupiah Redenomination Bill (Bill on Changing the Rupiah Price) there are two reasons for the redenomination of the rupiah.

 

First, for efficiency. By eliminating three zeros in the rupiah nominal, it will speed up transaction times, avoid human errors, and efficiency in quoting prices for goods and services.
Second, redenomination simplifies the transaction, accounting and reporting system for the State Budget because there are not many digits of Rupiah.

 

Impact
In terms of history and experiences of other countries, redenomination is usually carried out when the economy is experiencing high inflation or hyper inflation. But everyone also knows that currently inflation in Indonesia is relatively low or moderate because it is still below 10 percent. So the rupiah redenomination is not necessary.

 

In addition, there are negative impacts that will arise from the redenomination of the rupiah.

First; the psychological impact of society, especially the small community. The small community must feel panicked in facing this policy. This is natural because their wealth, in large part or even entirely, is in the form of cash. They are worried that this only asset will be lost, as was the case with the sanering policy in 1965.
Second; redenomination policy will push up prices. The increase in prices was driven by the actions of entrepreneurs who rounded up the prices of their goods. The illustration is that if the original price of goods was Rp. 7,500, the new price after redenomination should have been Rp. 7.5.
However, it is likely that to make it easier, or even take advantage of the existing opportunities, entrepreneurs will set a new price of Rp. 8. This will certainly trigger inflation. The government can indeed take supervisory measures to curb such rogue entrepreneurs, but it is very expensive and requires a lot of manpower.
Third; for entrepreneurs, the redenomination policy will add costs to change the list price of goods. Fourth; the cost of redenomination would be huge. These costs include the costs of socialization, supervision, and printing of new money, which is very large. This again will trigger the inflation rate.

 

On the basis of the huge impact that cannot be underestimated, I am one of those who do not agree with the rupiah redenomination policy. The nominal rupiah figure that is too large actually indicates that various parties are not yet optimal (namely institutions that are now part of the Financial System Stability Committee or KKSK, namely BI, OJK, LPS, Ministry of Finance and also the Regional Inflation Control Team or TPID) to maintain the value of the rupiah, either in terms of purchasing power and exchange rate.

 

So in my opinion, it is better for all parties as mentioned to work together to maintain the rupiah value rather than redenominate the rupiah

 

link  :  https://www.kompasiana.com/nugroho_sbm/5f05e8be097f36644153cc62/redenominasi-rupiah-apa-mengapa-dan-dampaknya?page=all#section1

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    Asked about the discourse of Rp. 1,000 to Rp. 1, Sri Mulyani: We were COVID First!

 

 

Hendra Kusuma - detikFinance
Thursday, Jul 09 2020 17:10 WIB

 

 

mentor keuangan

 

 

Jakarta -
Minister of Finance Sri Mulyani Indrawati finally opened her voice regarding the discourse of simplifying the value of the rupiah currency or redenomination as stated in the Minister of Finance Regulation Number 77 / PMK.01 / 2020 concerning the Ministry of Finance's Strategic Plan 2020-2024. This regulation was signed by the Minister of Finance (Menkeu) Sri Mulyani Indrawati on June 29, 2020.

 

He said the discourse was included in the medium-term plan.
"It has always been in the National Legislation Program, as requested by BI. So now we have COVID first. That's the medium term," said Sri Mulyani at the DPR building, Jakarta, Thursday (9/7/2020).

 

The discourse of simplifying the value of the rupiah currency or redenomination has sunk and is now reappearing in mid-2020. The plan to convert Rp. 1,000 to Rp. 1 is included as one of the 2020-2024 Mid-Term National Legislation Program Bill. The Rupiah Redenomination Bill is targeted to be completed between 2021-2024.

 

Sri Mulyani said PMK Number 77 of 2020 is a planning document that can be informed to the House of Representatives (DPR).

 

"We must always update to the DPR to convey what is called legislative planning from the medium term. So I also understand why you are all excited, you all see it today the same way. But we also still provide planning and must," he said.

 

As is known, there are at least two reasons for the Ministry of Finance to make this plan a priority program. Citing PMK 77 2020, Tuesday (7/7/2020), here are two reasons:
a. Generating economic efficiency in the form of accelerated transaction times, reduced risk of human error, and efficiency in quoting prices for goods / services due to the simple number of digits in Rupiah.
b. Simplify the transaction, accounting and reporting system for the State Budget because there are not many digits of Rupiah

 

link  :  https://finance.detik.com/moneter/d-5086811/ditanya-wacana-rp-1000-jadi-rp-1-sri-mulyani-kita-covid-dulu-lah

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             Redenomination, the Rupiah Changes IDR 1,000 to IDR 1 in 2024

 

Hendrawan Sucipto July 6, 2020

 

 

deras.co.id

 

 

Jakarta - The government is ready to discuss the Draft Law (RUU) that is not small in the Ministry of Finance's Strategic Plan 2020-2024.

 

There are 19 (nineteen) bills related to the duties of the Ministry of Finance of the Ministry of Finance to be stipulated in the Mid-Term National Legislation Program for 2020-2024.
Here are the details:
1. Bill on Stamp Duty;
2. Bill on Taxation Provisions and Facilities for Strengthening the Economy (Omnibus Law);
3. Bill on Financial Relations between the Central Government and Regional Government (RUU HKPD);
4. Bill on the Development and Strengthening of the Financial Sector (Omnibus Law);
5. Bill on the Management of State Assets (RUU PKN) (Omnibus Law);
6. Bill on Financial Reporting;
7. Bill on Capital Market;
8. Bill on Policy Guarantee;
9. Bill on Bank Indonesia (Bill on BI);
10. Bill on Banking;
11. Bill on General Provisions and Tax Procedures (RUU KUP);
12. Bill on Pension Funds;
13. Bill on Income Tax (RUU PPh);
14. Bill on Taxes on Goods and Services;
15. Bill on Land and Building Tax (RUU PBB);
16. The Bill on Indonesian Development Financing Institutions (RUU LPPI);
17. Bill on Changes in Rupiah Prices (Draft Redenomination Bill);
18. Bill on Customs; and
19. Bill on Excise

 

One of the bills that is interesting is the simplification of the rupiah or the bill on changes in rupiah prices.
“The Bill on Changes in Rupiah Prices (Draft Redenomination). The urgency of formation: Raising economic efficiency in the form of accelerated transaction times, reduced risk of human error, and efficiency of quoting prices for goods / services due to the simple number of digits in Rupiah, "wrote the Ministry of Finance in its PMK, Monday (6/7/2020).
Then the second urgency is to simplify the transaction, accounting and reporting system for the State Budget because there are not many digits of Rupiah.

 

 

deras.co.id

 

 

This change in the rupiah price has been fully explained in a study by Bank Indonesia (BI). Redenomination is not sanering or cutting people's purchasing power through cutting the value of money.

 

Redenomination is usually carried out in a stable economic condition and in a healthier direction. Meanwhile, sanering is cutting money in an unhealthy economic condition, where only the value of money is cut.

 

In redenomination, both the value of money and goods, only a few zeros are removed. Thus, redenomination will simplify writing the value of goods and services, followed by simplifying writing of payment instruments (money).

 

Furthermore, this will simplify the accounting system in the payment system without causing a negative impact on the economy.

 

Bank Indonesia views that the success of the redenomination is largely determined by the various things that are currently being studied, as has been done by several countries that have succeeded in doing so.

 

This redenomination is usually carried out when inflation expectations are in the low range and movement is stable, economic stability is maintained and there is a guarantee of price stability as well as the need and readiness of the community.

 

"The implementation of the Rupiah Redenomination, is currently under review by several related institutions, for the next process awaiting further direction and policies from the government," wrote an explanation from BI.
Bank Indonesia will not implement redenomination in the near future because Bank Indonesia realizes that redenomination requires a long national commitment and time and preparation. Therefore, in this research phase on redenomination, Bank Indonesia will actively conduct discussions with various parties to seek input. The results of the study conducted by BI will be submitted to related parties so that they can become a national commitment.

 

link  :  https://deras.co.id/2020/07/06/redenominasi-rupiah-ubah-rp-1-000-jadi-rp-1-di-2024/

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             Redenomination Plan That Will Change Rp. 1,000 To Rp. 1

 

August 16, 2020

 

 

Rencana Redenominasi Rupiah

 

 

The Indonesian government, through the Ministry of Finance, has again thrown the discourse on redenomination in the rupiah currency. Later, the 3 zeros behind the rupiah will be trimmed, so that the Rp. 1,000 denomination will become Rp. 1, Rp. 100,000 to Rp. 100 and so on.

 

Discussions on the redenomination plan will be held in 19 bills for the Mid-Term National Legislation Program for 2020-2024. This has even been stated in the Minister of Finance Regulation (PMK) Number 77 of 2020 concerning the Strategic Plan of the Ministry of Finance 2020-2024.

 

Will Not Be Done at Once
Even though the discourse on redenomination feels so strong, this step requires in-depth study. This plan has even existed since 2010. In order not to cause bad impacts, Bank Indonesia (BI) has prepared redenomination stages, including the simulation stage.

 

This simulation has been started since 2011, and is targeted to be completed in 2020. If you follow the simulation, here are the stages of the rupiah redenomination process in Indonesia.

 

Comparative Study Period
In this stage, the government conducts a comparative study to various countries that had redenominated. Turkey and Romania were countries that had been used as areas for comparative studies, and generally they succeeded with the redenomination program.

 

At that time, the Head of the Public Relations Bureau of Bank Indonesia, Difi A. Johansyah, said that the main requirement for the success of the redenomination program was the readiness of the community. Learning from Turkey, the biggest expense they spend is the socialization fund related to the nominal deduction of the money.
Socialization Period

 

The government has set the redenomination socialization period to be valid for approximately 2 years. During the socialization period, the government prepared various things, such as recording, accounting, information systems and others.

 

Within these two years, Bank Indonesia is confident that all Indonesians will be accustomed to redenomination. Turkey itself took 10 years to actually succeed in implementing this policy. This was also done with strict fiscal discipline.
Transition period

 

During this period, the price of goods will be written in two numbers, namely the old rupiah and the new rupiah. For example, for an item price of Rp. 10,000, later it will be written as Rp. 10 (new price). During this period, the public will use two currencies, namely the old and new rupiah.

 

The same is true for change. The public may use the old rupiah that has not been redenominated, and the new rupiah that has been redenominated. Slowly, BI will also withdraw old rupiah currency and replace it with new rupiah.

 

Substitution Period
For the replacement period, this means that the old rupiah currency will completely run out, either because it is damaged or withdrawn from circulation. In the community in circulation only new rupiah notes with an old picture, and new rupiah with a new image.

 

The complete replacement process will be completed when the rupiah currency circulating in the community is already a new rupiah with a new image. In addition, for small currency, it will be distributed in the form of coins, and the value of the fraction of cents will apply again.

 

link  :  https://maucash.id/rencana-redenominasi-rupiah

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       6 Facts About the Redenomination of the Rupiah from Rp1,000 to Rp1 That Make You Stupid

 

 

https: img.okezone.com content 2020 07 10 620 2244616 6-fakta-redenominasi-rupiah-rp1-000-jadi-rp1-yang-bikin-heboh-imtnILRPAd.jpg

 

 

Taufik Fajar, Journalist · Saturday 11 July 2020 10:07 WIB

 

 

JAKARTA - The issue of the redenomination of the Rupiah exchange rate is being discussed again. Initially, pictures or photos were circulated on social media showing Rp. 100,000 to Rp. 100.

 

Finance Minister Sri Mulyani also acknowledged that the issue of the redenomization of the Rupiah caused a stir. Where this is included in the Rupiah Redenomination Bill in the 2021-2024 strategic plan.
Okezone also summarizes the facts of redenomination that are busy being discussed, Saturday (11/7/2020):

 

1. The Rupiah Redenomination Strategic Plan
The government is again discussing the redenomination of the Rupiah currency. Redenomination is a currency simplification by reducing its three zeros, such as Rp1,000 to Rp1.
The plan rolled back when the finance minister issued PMK Number 77 / PMK.01 / 2020 regarding the Ministry of Finance's strategic plan 2020-2024. In the PMK, there are details of 19 bills on the duties of the Ministry of Finance that will be followed up, one of which is the redenomination of the Rupiah.

 

2. Urgency
Quoting PMK Number 77 / PMK.01 / 2020, it is stated the urgency of forming the Rupiah Redenomination Bill as a regulatory framework for the Ministry of Finance 2020-2024. There are two calculations from the government itself.
First, the Rupiah Redenomination Bill creates economic efficiency in the form of accelerating transaction times and reducing the risk of human error. As well as efficiency in quoting prices for goods and services due to the simple number of digits in Rupiah.

 

3. Amazing Rp. 100,000 to Rp. 100
Recently, the virtual world has been shocked by the display of redenominated Rupiah currency. This figure is in line with the discussion of the Rupiah Redenomination Bill.
In a picture circulating on social media, Jakarta, Wednesday (8/7/2020), there was Rp100,000 in cash before the redenomination, and during the transition the money had the same picture but the nominal had already become Rp100. Later when the redenomination takes effect, the money will become a new look with a new hero with a nominal value of Rp100.

 

4. Redenomination of Whose Ideas?
The Rupiah redemonization has indeed been included in the Ministry of Finance's plan. This continued the plan from the idea of the former Governor of BI, which at that time was held by Darmin Nasution.
"The redenomination plan has been from Pak Darmin. Even Mrs. Sri Mulyani already knows and wants to continue when she is also the Governor of BI," explained the Special Staff to the Minister of Finance Yustinus Prastowo.

 

5. Redenomination Discussed Next Year
BI Communication Executive Director Onny Widjarnako said this year Bank Indonesia will only focus on economic recovery. The Rupiah redenomination plan will not be carried out this year.
"The redenomination of the Rupiah has not started yet," said Onny.
In the same vein, the Head of Communications at the Ministry of Finance (Kemenkeu) Rahayu Puspasari said that the discussion on the redenomination of the Rupiah is not the main focus this year.
"At the Ministry of Finance there is no discussion regarding redenomination," he said.

 

6. Said Sri Mulyani
Minister of Finance (Menkeu) Sri Mulyani said the plan to redenominate the Rupiah has indeed shocked the public. This is because the Rupiah redenomination is based on the Rupiah Redenomination Law (RUU), in which the policy is included in the Ministry of Finance's strategic plan (renstra) for the next five years.
"So I also understand why you are all excited, you all see it today the same way. But we also still provide planning and must," said Sri Mulyani.

 

link  :  https://www.okezone.com/tren/read/2020/07/10/620/2244616/6-fakta-redenominasi-rupiah-rp1-000-jadi-rp1-yang-bikin-heboh?page=2

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       Not Like Viral 1.0, Here Are Examples of Redenomination Money!

 

 

NEWS - Cantika Adinda Putri, CNBC Indonesia

10 May 2021 16:25

 

 

rupiah 1.0 (Ist)

 

 

Jakarta, CNBC Indonesia - Crowds circulating about the 1.0 note on social media. This money was later associated with redenomination.

The 1.0 note issued by Peruri is a house note or specimen money that is used as a marketing tool to promote samples of products or money produced by Peruri.

The 1.0 note, also confirmed by Peruri, was illegitimate as a means of payment.

"The House Note (specimen money) issued by Peruri is not Rupiah and is not legally used as a means of payment," wrote Peruri who was quoted on Monday (10/5/2021).
The monetary authority or Bank Indonesia (BI) also confirmed that the denomination in circulation was not rupiah, but House Notes or specimen money for Peruri's interest.

However, the redenomination plan is still in BI's discourse to be realized.

"The discourse continues," said Head of the BI Communication Department Erwin Haryono to CNBC Indonesia, Monday (10/5/2021).

Redenomination, said Erwin, has many aspects that must be considered. The responsibility for the success of the program is not only BI, the government, the business world but also the general public.

"As experiences in many countries, people's acceptance plays a key role. The wrong perception about redenomination is equated with sanering (cutting the value of money) in the past," he explained.

"Apart from that, this policy must also be implemented in a stable economic condition so as not to cause unnecessary panic," continued Erwin.

Redenomination is usually carried out in a stable economic condition and leads to a healthier direction. Meanwhile, sanering is cutting money in an unhealthy economic condition, where only the value of money is cut.

In redenomination, both the value of money and goods, only a few zeros are removed. Thus, redenomination will simplify writing the value of goods and services followed by simplifying writing of payment instruments (money).
Furthermore, this will simplify the accounting system in the payment system without causing a negative impact on the economy.

 

INFOGRAFIS, Redenominasi Mata Uang Rupiah

 

 

Just so you know, Minister of Finance Sri Mulyani decided on the Redenomination Bill to be included in the Ministry of Finance's strategic plan for 2020-2024.

This redenomination is then contained in the Minister of Finance Regulation (PMK) Number 77 / PMK.01 / 2020.

The Ministry of Finance noted that there are at least two reasons why the rupiah currency value simplification must be carried out.
First, to create efficiency in the form of accelerated transaction time, reduced risk of human error, and efficiency in quoting prices for goods / services due to the simple number of digits in rupiah.
Second, to simplify the transaction, accounting and reporting system for the State Budget because there are not many or fewer rupiah digits.

In 2017, this was the first time that the Ministry of Finance and Bank Indonesia (BI) submitted a Currency Redenomination Bill.

The then Minister of Finance, who was also Sri Mulyani, together with the Governor of Bank Indonesia (2013-2018 period) Agus DW Martowardojo submitted a direct application for the Currency Redenomination Bill to President Joko Widodo (Jokowi) at the Merdeka Palace, Jakarta.

It was reported that President Jokowi's response at that time was welcoming and ready to be discussed by legislators or in this case the House of Representatives (DPR).

Unfortunately, from 2018 to 2020, the Redenomination Bill was not included in the national legislation program (prolegnas).

This is what it looks like

 

 

INFOGRAFIS, Redenominasi Mata Uang Rupiah

   

 

link  :      https://www.cnbcindonesia.com/news/20210510143034-4-244671/bukan-kayak-10-yang-viral-ini-lho-contoh-uang-redenominasi/2    

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                       Redenomination Plan, See the Pros and Cons
 

Tira Santia
19 Jul 2020, 13:04 WIB

 

Hari Ini, Rupiah Ditutup Menguat

 

 

Liputan6.com, Jakarta - The rupiah simplification or redenomination plan was again rolled out by the Ministry of Finance (Kemenkeu). The redenomination step is one of 19 regulations in the Ministry of Finance's Strategic Plan (Renstra) for 2020-2024.
Economist and Executive Director of the Institute for Development of Economics and Finance (Indef) Tauhid Ahmad, welcomed the discourse of redenomination.
If the redenomination policy is implemented in Indonesia in a timely manner, it can improve the image of the Indonesian currency in other countries' currencies, and have other positive impacts.
"It is an important thing in enhancing the image in the currencies of other countries, especially the US dollar. So of course it will increase the credibility of our currency in foreign countries, also affect investment and so on, "said Tauhid to Liputan6.com, Sunday (19/7/2020).
According to him, with redenomination, the condition of the Indonesian exchange rate will be relatively stable because the comparison is equal, for example USD 1 to Rp 15. From the previous USD 1 = Rp. 15,000, he considered the comparison very far.
Another advantage that is obtained if you apply redenomination, which is to facilitate financial transactions with a redenomination value, for example Rp. 1000 to Rp. 1 will facilitate financial transactions.
 
Negative impact

 

FOTO: Bank Indonesia Yakin Rupiah Terus Menguat

 

 

Nevertheless, Tauhid said there was a negative side, it would harm society, if the implementation of this redenomination was not properly prepared.
"One product was previously sold for Rp. 14,000, it could be Rp. 14,500, rounding it to Rp. 14, but there is a currency that must be issued, namely the Rp. 0.5 denomination currency and so on," he explained.
That is the reason if the rupiah denominations are not prepared, the redenomination will be detrimental to the community, if it is to be reduced without careful planning, then of course the price will fluctuate, and there needs to be clarity on the redenomination plan.
"In my opinion, it can be applied, but there must be thorough preparation, of course in the financial and banking sectors it is clear that each must have preparations, because all will be redenominated and later the value will be reduced and it must be converted and so on," he concluded.

 

 

     Ministry of Finance Releases Discourse on Rupiah Redenomination

 

FOTO: Bank Indonesia Yakin Rupiah Terus Menguat

 

Previously, the Ministry of Finance (Kemenkeu) would deduct zero amounts in rupiah or redenominations. This simplification of the rupiah will be contained in the Bill on Changes in the Price of the Rupiah (Draft Bill on Redenomination).
The redenomination step is one of 19 regulations in the Ministry of Finance's Strategic Plan (Renstra) for 2020-2024. This strategic plan is listed in the Minister of Finance Regulation Number 77 of 2020.
The urgency for the formation of the Redenomination Bill is related to the creation of economic efficiency, in the form of accelerated transaction times and reduced risk of human error, efficiency in quoting prices for goods and services due to the simple amount and digits of the rupiah.
"Simplifying the transaction, accounting and reporting system for the State Budget because there are not many rupiah digits," said liputan6.com from the PMK 77/2020 document, Friday, July 10, 2020.
In the matrix of 19 regulations included in the Ministry of Finance's Strategic Plan 2020-2024, the Ministry of Finance explained that the Redenomination Bill will be under the responsibility of the Directorate General of Treasury (DJPb) and will be assisted by the Secretariat General (Setjen) and the Fiscal Policy Agency (BKF) as related units.
So, what exactly is redenomination? Why did the redenomination take place and will the nominal value of Indonesian currency change from Rp. 1,000 to Rp. 1?
Redenomination is a simplification of the value of the rupiah which, if done, will facilitate transactions in the community and compile a company's balance sheet.
The redenomination will cut the 3 digits value of the rupiah from behind. For example, from Rp. 1,000 to Rp. 1, or from Rp. 1,000,000 to Rp. 1,000.

 

link  :  https://www.liputan6.com/bisnis/read/4309309/rencana-redenominasi-simak-untung-dan-ruginya

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Further Rupiah Redenomination, Bank Indonesia: Wait for the Right Economic Conditions
 
 Hadijah Alaydrus - Bisnis.com 19 August 2020 | 10:10 WIB

 

 

Karyawan menghitung uang pecahan Rp.100.000 di salah satu Bank yang ada di Jakarta, Senin (4/6). Bisnis - Abdullah Azzam

 

 

Bisnis.com, JAKARTA - Bank Indonesia revealed that the currency redenomination plan will continue and will be implemented when economic conditions are stable. Deputy Governor of Bank Indonesia Rosmaya Hadi said that the redenomination or simplification of the value stated in the currency is still being discussed. According to him, redenomination has a goal related to the efficiency of writing in currency digits.

 "We will do it when the economic conditions are right," said Rosmaya in a media briefing related to the issuance of 75th anniversary of Indonesia's independence, Tuesday (18/8/2020).

 He said that Bank Indonesia has its own team related to the redenomination program. "There is one more team. There are steps," said Rosmaya.

 The redenomination plan has been rolled out since the time of the Governor of Bank Indonesia for the 2010-2013 period, Darmin Nasution.

 Based on Bisnis records, in August 2011, Darmin was optimistic that the redenomination process or changes in the rupiah price would begin before his term of office expires in 2013. This is because the coordinator for simplifying the currency is already in the hands of the Vice President, so it is considered that it will simplify the plan. His job at the central bank, he said, was only to fix and restructure the foundation of the institution so that it was respected and beneficial to the wider community. This discourse had appeared to the public in 2017, the Governor of BI for the 2013 to 2018 period Agus D.W. Martowardojo insisted that the discussion on redenomination continue. Agus assessed that the condition of the Indonesian economy at that time was quite right to eliminate three digits in the nominal currency, without trimming the value, especially when conditions of low inflation and economic growth improved in the first quarter of 2017 by 5.01 percent on an annual basis. "We see that the first quarter / 2017 compared to the first quarter / 2017 or compared to the fourth quarter / 2016, everything is better. So, this is the right time," he said Monday (29/5/2017). Unfortunately, due to Covid-19, Indonesia's economy was again under pressure. The discourse on redenomination has never been repeated.

 

link  :  https://finansial.bisnis.com/read/20200819/11/1280918/redenominasi-rupiah-lanjut-bank-indonesia-tunggu-kondisi-ekonomi-pas

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       The Zero Value of IDR 75,000 Is So Small, Is It Redenomination?

 

Hendri Tri Widi Asworo - Bisnis.com 17 August 2020 | 08:18 WIB

 

 

Ilustrasi desain uang pecahan Rp75.000 yang beredar.

 

 

There is something unique about the new Rp75,000 denomination, the zeros on the currency are smaller than 75. Is it related to the redenomination program?

 

Bisnis.com, JAKARTA - Today, Monday (17/8/2020), Bank Indonesia will release a new IDR 75,000 note to commemorate the 75th Independence of the Republic of Indonesia. There is something interesting about the shape and image of the banknote. Based on the new Rp75,000 bill that Bisnis received and confirmed by Bank Indonesia, the color of the money is similar to the Rp100,000 note, which is pink. Likewise, there is a picture of the Indonesian proclamator Soekarno-Hatta. However, on the same side, there is a train background and a photo of the flag raising during the 1945 Proclamation of Independence. Meanwhile, on the other hand, the Rp75,000 bill contains silhouettes of various faces of Indonesia consisting of various ethnicities and cultures. In addition, there are satellite images and maps of Indonesia on this side.

 

 What is quite unique about this new denomination is that the number zero is very small compared to the number 75. In fact, it is almost invisible when viewed from a distance. Is the writing of these little zeros related to the redenomination program? "No," said Bank Indonesia Senior Deputy Governor Destry Damayanti to Business, Sunday (17/8/2020) night.

 Although he denied the redenomination in the new IDR75,000 note, Destry confirmed that what was launched today was pink. "Yes," he said briefly. As we know, the government together with Bank Indonesia have long planned to redenominate figures in the rupiah exchange rate. Redenomination is the simplification of a currency's value into a smaller one without changing the exchange rate. For example, a currency figure of IDR 75,000 would be written as IDR 75 only. It aims to simplify writing and efficiency in financial accounting calculations. In terms of prestige, the rupiah exchange rate is not too big when compared to other countries, for example one US dollar which is equivalent to Rp.14,000 to Rp.14.

 

 However, the redenomination plan ran aground since it was initiated in the era of President Susilo Bambang Yudhoyono until the era of President Joko Widodo. Recently, the discourse on redenomination has resurfaced after the Ministry of Finance made the Bill on Changes in Rupiah Prices as one of the focuses of attention in the 2020-2024 period. This is stated in PMK No.77 / PMK.01 / 2020 regarding the strategic plan of the Ministry of Finance 2020-2024. In the 2014-2019 period, the redenomination plan was also included in the Ministry of Finance's strategic plan, but it was not realized. The redenomination plan itself was initiated by Darmin Nasution when he was Governor of Bank Indonesia for the period 2009 to 2013.

 

link  :  https://finansial.bisnis.com/read/20200817/90/1279994/angka-nol-uang-baru-rp75.000-kecil-banget-apakah-redenominasi?utm_source=Desktop&utm_medium=Artikel&utm_campaign=BacaJuga_1

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