Redenominasi again become the focus of central banks

Redenominasi again become the focus of the central bank after the issue appeared a long time. Bank Indonesia is conducting internal discussions before the reference to be submitted to the government to reduce the fractional value of the rupiah.

Redenominasi is the practice of cutting the value of a currency becomes smaller without changing its exchange rate. This practice is different from Indonesia sanering ever undertaken in the days of the Old Order. Sanering cut the exchange value of money so that this process reduces the purchasing power.

Governor of Bank Indonesia was chosen Nasution earlier said would soon deliver the final result of internal discussions to the government in 2010.

The central bank feels the need doing redenominasi because as is well known that the largest Indonesian banknotes currently USD 100 000. The rupiah has broken the world's second largest, is the largest first printing currency 500 000 Vietnamese Dong. But do not take into account the state of Zimbabwe, the country will never print a 100 billion Zimbabwe dollars in a single sheet of currency.

To be able to perform the simplification unit of money will require a number of requirements. There are at least three conditions are absolutely satisfied that a stable economy, low inflation and stable, and the guarantee price stability. Not to mention the approval of the president and House of Representatives.

As quoted Detiknews.com, was elected Governor of Bank Indonesia in Nasution Indonesian Bank Building, Jalan MH Thamrin said, "Redenominasi that the process will be discussed first with the government and the president and must pass through the House of Representatives (DPR) recently we instituted '.

But according to some observers, the discourse reduction without reducing the value of fractional amount of money or value redenominasi considered not necessary.

If redenominasi done, buying and selling transactions in society will tend to be chaotic because the Indonesian currency system is still functioning properly.
It was announced by the Chief Economist of the Danareksa Research Institute Purbaya Yudhisadewa when talking with detikFinance in Jakarta, Monday (08/02/2010).

He explains, "The need to do redenominasi is not too urgent. The system the currency is still functioning well, where the public and the financial world can conduct transactions without the constraints of excessive".

Purbaya explain redenominasi process can be confusing people, because not all people can accept new concepts quickly.
He added, "Especially during this our weakness is also high in the socialization aspect. Transactions of sale and purchase in the community will tend to mess," he added.

Bank Indonesia (BI), continued Purbaya, need to take into account also the psychological impact of this policy. Emphasized, "For now it seems a lot to lose from the thankfully. Redenominasi can erode confidence in the rupiah so fast."

Purbaya Likewise, the business world was reminded of the potential misperception of the plan of Bank Indonesia (BI) to perform redenominasi rupiah to reduce the nominal money.

In addition, the current policy redenominasi actually not too necessary. As disclosed Chairman Indonesian Employers Association (Apindo) Sofjan Wanandi told Media Indonesia, yesterday (Sunday, 1 / 8). According to him, the policy will not affect much. He explained, "For employers, this policy has no effect. However, if the government and the central bank did not do well the preparation and dissemination, it will be very big impact on the marketplace."

Meanwhile, Bank Indonesia deputy governor Budi S Rochadi say, in doing redenominasi takes between four to five years. He explained, "The process is not shortened, should take four to five years."

Rochadi added, "The most difficult to do quickly and easily is the socialization of the entire people of Indonesia that reaches hundreds of millions of souls."

Still, for some among redonominasi also has great benefits. Money Market observers Farial Anwar said there are several advantages redenominasi. One advantage is that the financial records will not be large.

Apart from That, redenominasi can stabilize the rupiah exchange rate against foreign currencies. However, that should be the primary focus of BI, namely the community psychology.

"For example, cutting the value of fractional Rp 1,000 to Rp. 1 then the value of U.S. $ 1 so only Rp9. With these values, the fluctuation of the rupiah against the U.S. dollar will move in units of cents that will Iebih psychologically unstable."

Farial adding the positive side for the community is in a transaction need not take a lot of money, while for the government and BI would be easier to monitor the circulation of money. Alha-sil, in terms of printing money will be fewer and the economic side is also positive in the long term.

Nevertheless. Farial reminiscent of the emergence of cost, for example, to revise all laws and regulations. Especially those related to the amount of fines. In this section, the government must anticipate in advance so that no confusion would arise because the implementation of this redenominasi.

On the other hand, economist Martin Panggabean redenominasi rupiah reminded that followed the change of name. The goal is that people are not confused with redenominasi the currency so as to prevent monetary misperception.