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BONSERNEWS.com – DPD Deputy Chairman Sultan B Najamudin asked Bank Indonesia and the Government to be wary of rising inflation due to the planned implementation of the rupiah currency redenomination policy.
“The redenomination of the rupiah certainly has the good aim of simplifying and increasing the bargaining position of the rupiah in the trade process and the Indonesian and global economy. We fully support the BI redenomination policy with several notes,” said the Sultan, Saturday 1 July 2023.
According to the former chairman of HIPMI Bengkulu, the implementation of the rupiah redenomination policy needs to pay attention to the potential for inflation due to psychological market shock and to use this policy to set prices unilaterally. On the other hand, the government needs to mitigate the impact of public money illusions on the value of the new currency.
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“We see that there will be a very wide opportunity for inflation to occur amid the current global economic uncertainty. Despite good growth, the national economic fundamentals, which are supported by public consumption activities, are not yet ready to accept this policy,” emphasized the Sultan.
This, he continued, was because the pricing of goods still applied a monetary value in hundreds of rupiah denominations. Redenomination might make the value of money more efficient, but in the short term it will be economically ineffective to boost people’s purchasing power.
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“Besides inflation, the government also needs to consider the issue of the budget for printing new money and socializing the redenomination,” he concluded.
The public is worried that the redenomination policy plan, which cuts the rupiah currency from IDR 1,000 to IDR 1, could trigger an increase in the prices of goods. Bank Indonesia has also seen similar problems.
This redenomination plan has actually been included in the Rupiah Redenomination Draft Law (RUU). Minister of Finance Sri Mulyani Indrawati has included this bill in the Ministry of Finance’s 2020-2024 strategic plan. As stipulated in the Minister of Finance Regulation (PMK) Number 77/PMK.01/2020. ()