Indonesian re-denomination needs 10-year preparation

Padang, West Sumatra (ANTARA News) – Senior Deputy Governor of Bank Indonesia (BI) Mirza Adityaswara stated that the re-denomination process or reducing moneys nominal needs a long preparation of about 10 years to allow people to really understand it before being implemented.

“We are not in a rush, the government needs the people to fully understand the process of re-denomination,” he said in Padang on Monday after appointing West Sumatras Indonesian Bank Head, Endy Dwi Tjahjono.

He stated that re-denomination was different from devaluation, which was implemented during early post-independence Indonesia due to high inflation rate, which reached hundreds of percent.

“For denomination, money value is changed, while re-denomination would not change its value,” he said.

According to him, implementing of re-denomination needs a law, which requires 5 to 10 years for preparation after being ratified.

“Therefore, this is a long-term plan, and the most important right now is to educate the people,” he added.

Earlier, Minister of Finance Sri Mulyani said that the re-denomination plan or simplifying the bills nominal needs would consider the quality of economy.

“Re-denomination should be based on strong and stable economic foundation,” she noted.

The stability could be seen in national balance of payments, fiscal, and monetary policies. “All should have good quality and so we could be confident about that,” she said.

Sri Mulyani herself stated that the nationals financial budget is considered realistic and credible, which was proven through investment grade from ranking institution.

“If the policy is consistent, economical condition could be maintained, which would lead to positive things,” she remarked.

Besides that, Sri Mulyani also explained that transition progress to re-denomination needs a whole lot of time

Source: Antara News