Rupiah redenomination, the benefits and risks that the government needs to anticipate
ILLUSTRATION. The Redenomination Bill is stipulated in the Mid-Term National Legislation Program (Prolegnas) 2020-2024.
Reporter: Rahma Anjaeni | Editor: Khomarul Hidayat
KONTAN.CO.ID – JAKARTA. The Ministry of Finance (Kemenkeu) plans to simplify the rupiah value or redenomination. This plan is contained 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.
Member of Commission XI of the Indonesian House of Representatives (DPR) from the Prosperous Justice Party (PKS) faction Anis Byarwati said, actually the plan to redenominate is not a new discourse. In 2010, Bank Indonesia (BI) also planned five stages of the implementation of the rupiah redenomination.
“Indeed, there are several benefits if we do redenomination, such as the ease and simplification of the financial recording system for the government, business world and society,” Anis told Kontan.co.id, Wednesday (8/7).
Also Read: The Ministry of Finance emphasized that the discussion on the Rupiah Redenomination Bill was not discussed this year
Especially about the ease of the rupiah calculation technique. This is because, so far, the calculation of the rupiah has always involved many digits that could potentially cause errors in transactions.
Especially for the government, it will facilitate the preparation of the state revenue and expenditure budget (APBN), whose value currently reaches thousands of trillions of rupiah.
Another benefit, redenomination can improve the image of the rupiah against other countries’ currencies. The quoted exchange rate of the rupiah against the United States (US) dollar will be the same as the currencies in other countries.
However, redenomination also carries a number of risks. Anis assessed that there is a perception and concern in the community that the rupiah redenomination is the same as sanering.
“It is feared that many investors will convert their rupiah into foreign currencies, especially US dollars. Even though the two policies are different, redenomination only reduces the number of digits without reducing the value of the money, while sanering is reducing the purchasing power and value of the money,” said Anis.
Another risk relates to potential price increases due to excessive rounding of prices. This is the result of entrepreneurs and traders raising prices at will.
To overcome risks during implementation, said Anis, a strong legal foundation is needed and also support from the community. Therefore, there must be active, intensive, and continuous socialization and education to the public about what redenomination is.
“Then it is necessary to have good cooperation between the government, BI, and the Financial Services Authority (OJK) and supported by banks, industry associations, entrepreneurs, educational institutions, and other public institutions,” said Anis.
Also Read: The rupiah redenomination needs to be socialized continuously so that it is not mistaken
DONATION, Get Free Vouchers!
As an expression of gratitude for your attention, there are free vouchers worth donations that can be used to shop at the KONTAN Store.
