‘Ribu’ elimination: Indonesian central bank pushing for rupiah redenomination

The redenomination of Indonesia’s currency, the rupiah, has been discussed for the past few years. But now, the nation’s central bank, Bank Indonesia (BI) has given the strongest indication yet that the rupiah may lose three zeroes in the near future.

BI Governor Agus Martowardojo said that now is the ideal time for Indonesia to consider simplifying its currency by dividing the values of each bank note by a thousand, as the country is seeing steady economic growth of 5.01% this year.

“We are recommending it, because redenomination is good for the reputation of Indonesia’s economy and efficiency and accountability,” Agus said, as quoted by Kompas yesterday.

Agus said that BI is hoping that redenomination plans will be drafted into the 2017 National Priority Legislative Program (Prolegnas) but concedes that parliament may not see it as a priority issue at the moment.

Should the government and legislation agree on the rupiah’s redenomination, the entire replacement process is predicted to take seven to eight years.

At the moment, the smallest rupiah bank note is 1,000 while the largest is 100,000. Colloquially, the Indonesian word for thousand, “ribu”, is often said at the end of a monetary value instead of the word rupiah itself (saying both would contain far too many syllables, e.g. dua ratus ribu rupiah for Rp 200,000 is often simplified to just dua ratus ribu in everyday conversation). Should the rupiah redenomination come to pass, we may have to get used to saying rupiah instead of ribu again, unless, of course, we’re talking about huge amounts of money.

As for the coins, which are currently worth Rp 100 – Rp 1,000, it may be possible that they would be eliminated altogether, or Indonesia could introduce a smaller form of currency worth 1/100 of the basic currency, much like the cent to the dollar.



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