Government, BI, and Lawmakers Align on Redenomination Plan, Target Completion by 2027

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JAKARTA, Investortrust.id — Indonesia’s long-discussed redenomination of the rupiah has entered a more concrete stage of preparation, with the Ministry of Finance, Bank Indonesia (BI), and the House of Representatives (DPR) signaling alignment on the need for careful planning, robust preconditions, and public education before implementation.

The policy—meant to simplify the currency’s nominal digits without changing its real value—is now officially included in the government’s 2025–2029 legislative program and is targeted for completion by 2027.

Finance Minister Purbaya Yudhi Sadewa said the entire redenomination process would be led by the central bank in accordance with monetary and technical needs. “It’s a central bank policy,” he said on Tuesday, Nov 11, 2025, adding that BI would decide the appropriate timing.

“They will apply it when it’s needed, but not now, not next year—I don’t know when,” he told reporters in Surabaya.

The statement followed BI’s confirmation that it would proceed with redenomination only when economic, political, social, and technical conditions are fully ready. The measure is covered under the Finance Ministry’s Regulation No. 70/2025 on the ministry’s 2025–2029 strategic plan, which lists the Rupiah Value Adjustment Bill (Redenomination) as one of four key draft laws.

BI’s Head of Communications, Ramdan Denny Prakoso, emphasized that the central bank would continue to safeguard monetary stability and economic growth during the redenomination process. “Implementation will be based on the right timing and will consider political, economic, social, and legal stability as well as logistical and IT readiness,” he said.

Denny described redenomination as a technical simplification—removing several zeros from the nominal value of the rupiah without reducing its purchasing power or exchange value.

“It’s a strategic step to increase transaction efficiency, strengthen the rupiah’s credibility, and support the modernization of the national payment system,” he said.

Parliamentary Caution: Preconditions Before Execution

The House Budget Committee Chairman Said Abdullah stressed that redenomination must not be rushed. 

“Redenomination requires preconditions,” he said at the parliamentary complex on Tuesday, Nov 11, 2025. These include sustained economic, political, and social stability, as well as full government readiness.

“If those are not yet met, don’t even try,” he cautioned.

Said added that redenomination is not merely about erasing three zeros. “The rupiah could become vulnerable to price manipulation afterward,” he warned.

He also underlined that no urgent need exists yet, suggesting instead a phased approach: one year of public education in 2026, followed by internal government preparation and formal legislative deliberation in 2027.

He estimated that the overall process—from drafting and deliberation to full rollout—would take at least seven years, including a one-year socialization phase to align public understanding.

Economic Considerations: Inflation and Market Impact

Coordinating Minister for Economic Affairs Airlangga Hartarto acknowledged that redenomination could have short-term inflationary effects when implemented. 

“Yes, it will have an impact,” he said on Monday, Nov 10, 2025. While confirming that the matter has not yet reached the Cabinet’s agenda, he noted that such policies inevitably affect consumer prices in the transition period.

Despite this, BI has reiterated that the redenomination will not reduce the rupiah’s purchasing power or value. The central bank views the initiative as part of long-term monetary modernization to align Indonesia’s currency structure with global standards.

Investor Confidence Unshaken

Meanwhile, Danantara Chief Operating Officer Dony Oskaria said the redenomination plan would not deter investment inflows.

“There’s no reason to worry. Everything the government does has gone through deep consideration and study,” he said on Tuesday (Nov 11, 2025), noting that the policy is designed to maintain macroeconomic stability and investor confidence.

Dony, who also serves as Commissioner at a state-owned enterprise regulator, said Danantara supports the government’s efforts to improve monetary efficiency and currency credibility. “Whatever the government does, it’s always for the best interest of the people,” he added.

Legislative Path and Timeline

According to the Finance Ministry’s Regulation No. 70/2025, the Redenomination Bill joins three other priority drafts—covering state asset management, auctions, and professional valuation. The redenomination law is categorized as a “carry-over bill” with a targeted completion date of 2027.

The Directorate General of Treasury has been assigned as the responsible unit, while BI, the Finance Ministry, and the DPR will coordinate to ensure synchronization across fiscal, monetary, and legal aspects.

The government has outlined several key objectives for redenomination with the first being enhancing economic efficiency through simplified accounting and transaction processes. 

Secondly, it is hoped to improving national competitiveness by aligning currency notation with international standards, and third, ensure sustainable growth by maintaining monetary stability and purchasing power.

Lastly, the government seeks to strengthening the rupiah’s credibility in domestic and international markets.

With these foundations in place, policymakers view redenomination not merely as a cosmetic change, but as a symbol of Indonesia’s economic maturity—signaling a stable, confident, and efficient financial system prepared for the next stage of modernization.