Space-id — The issue of the denomination of the Rupiah is back in public after the government claims it's doing a deep study regarding the possibility of simplification of national currency. This move is rated to potentially increase the efficiency of economic transactions and strengthen the perception of complex stability at an international level.
The Treasury Ministry explains that denominations—or simplify the number of digits in the currency—It's a technical process that doesn't affect the power of society. With denomination, the structure of the pieces will be summed without changing the true value of goods and services. For example, Rp1,000 fractions will be simplified as Rp1 in new rupees, but prices will be proportionately adjusted.
The government confirmed that the study was still in the analysis stage and there was no final decision. A number of calculated aspects includes the readiness of the banking system, the implications of digital transactions, the cost of printing new money, until public readiness faces that change.
The Indonesian Bank highlighted the importance of education before this policy was applied. According to these institutions, the simplification of the currency should be accompanied thoroughly in order not to cause confusion, especially in small and middle businesses which still use a lot of cash transactions.
A number of economists have stated that the denomination of the Rupiah can provide some benefits, among other things, improve the efficiency of accounting records, ease cash transactions, and improve the image of currency in the international eye. However, some have also reminded that this policy does not necessarily solve economic fundamental problems such as inflation or fictional stability.
Up until now, the Indonesian government and Bank are still collecting input from various interests before putting forward recommendations. If applied, a rupian denomination policy is estimated to be carried out gradually with certain transitions to ensure smooth processes throughout the economic sector.
The government insists that the entire procedure will be carefully prepared, given that the change in currency is a strategic policy that has extensive impact on society.
