The government has issued Minister of Finance Regulation number 70 of 2025 on the Ministry of Finance’s Strategic Plan for 2025-2029. One of the highlights in the attached regulation is the policy on the draft law on rupiah redenomination, which is planned to be finalized in 2027. Redenomination is the simplification of currency denominations to smaller amounts without changing their exchange rates. Previously, the redenomination plan was also included in the national legislation program. The redenomination policy is a step to improve transaction efficiency, strengthen the credibility of the rupiah, and support the modernization of national payments.
The redenomination of the rupiah is also a strategy to maintain the continuity of national economic development, stabilize the value of the rupiah so that people’s purchasing power can be maintained, and increase the credibility of the rupiah. According to Bank Indonesia, the redenomination of the rupiah will not be carried out hastily and will take into consideration the momentum, namely political, economic, and social stability, as well as legal, logistical, and information technology readiness. The redenomination process is also designed to be gradual and inclusive, and must be carefully planned and involve all stakeholders.
The redenomination plan has actually been rolled out by Bank Indonesia since 2010 and has been included in the 2013 national legislative priority program, but it has not been approved until now. Redenomination of the rupiah can provide benefits if it is carried out systematically, planned and measured, and is important in the era of open trade zones in international trade.
There are countries in the world that have redenominated their currencies and can be said to have been successful, including Turkey, Hungary, Ukraine, and Romania. However, there are several countries that have failed to redenominate, including Brazil, Russia, North Korea, and Zimbabwe. The government should carefully study the impact of redenomination so that it does not fail in implementing the redenomination of the rupiah, which would affect the country’s economy.
By Olina Rizki Arizal – Partner
TBrights is a tax consultant in Indonesia that is currently an Integrated Business Service in Indonesia that can provide comprehensive tax and business services.
Reference:
- The Minister of Finance Regulation No. 70 of 2025 concerning the Ministry of Finance’s Strategic Plan for 2025-2029
