The Indonesian government has reintroduced its plan to simplify the rupiah currency through a redenomination policy, with the goal of completing the legislation (the Redenomination Bill) by 2027.
This initiative is part of the Ministry of Finance’s Strategic Plan for 2025–2029, as stated in Minister of Finance Regulation (PMK) Number 70 of 2025, issued on October 10, 2025, and officially effective as of November 3, 2025.
The regulation states that “the Redenomination Bill is a carry-over bill planned for completion in 2027”.
The Directorate General of Treasury (DJPb) of the Ministry of Finance will lead the drafting of this bill, with the regulatory framework targeted for completion in 2026.
Simplifying Currency Without Changing Value
Redenomination is a process of simplifying the written denomination of currency without changing its actual value or people’s purchasing power. Under the proposed scheme, three digits will be removed from rupiah banknotes. In other words, Rp1,000 would become Rp1, while the value of goods and services remains the same.
The main objectives of this policy are to improve economic efficiency, strengthen monetary stability, and enhance public confidence in the rupiah at both national and international levels.
The formation of the Redenomination Bill is expected to ensure sustainable national economic development, stabilize the rupiah’s value to maintain public purchasing power, and improve the currency’s credibility.
A Long-Standing Agenda Revived
The redenomination plan is not new in Indonesia’s economic history. A similar proposal was discussed in 2010, when Bank Indonesia first introduced the idea of simplifying rupiah denominations. It was included in the 2013 Priority National Legislation Program (Prolegnas), but the discussion was postponed.
In 2013, the government even submitted the draft Redenomination Bill to the House of Representatives (DPR). The draft proposed removing three zeros from the rupiah. However, the bill was shelved without further deliberation.
The issue resurfaced in 2016 and 2017, but again, it failed to materialize due to economic and political considerations.
Now, through PMK No. 70/2025, the plan has returned as a medium-term strategic program under the 2025–2029 Ministry of Finance agenda, marking the revival of a long-delayed initiative that has been on hold for more than a decade.
Bank Indonesia: Ready, But Waiting for the Right Moment
Bank Indonesia has previously stated that it is technically ready to carry out redenomination. In 2023, BI Governor Perry Warjiyo emphasised that the central bank had prepared the currency design, operational systems and implementation simulations for the policy. However, execution must take into account stable economic and political conditions.
Perry explained, “Redenomination brings many economic benefits, especially in terms of efficiency. By removing three zeros, economic efficiency will increase”.
He also noted that having too many digits in rupiah denominations slows down transaction processes. “Without the three zeros, transaction settlement will be faster,” he said.
Earlier, in 2017, BI Deputy Governor Mirza Adityaswara estimated that the redenomination process could take up to ten years, and that public education would be crucial to preventing misunderstandings about the policy and avoiding the perception of devaluation.
Strategic Initiatives for 2025–2029
In addition to the Redenomination Bill, the Ministry of Finance will also propose three other bills in the same period:
• The Auction Bill (target completion 2026)
• The State Asset Management Bill (target completion 2026)
• The Appraisal Bill (target completion 2025)
These four legislative initiatives are expected to support the achievement of the Ministry of Finance’s strategic objectives over the next five years.
