After over a decade on hold, the government officially revives its plan to trim zeros from the rupiah.
Indonesia’s Finance Ministry has reintroduced the long-awaited redenomination of the rupiah, marking a major step toward simplifying the national currency and boosting economic efficiency. The initiative, shelved for more than ten years, has now been formally integrated into the ministry’s 2025–2029 Strategic Plan.
A Long-Delayed Plan Returns
The Ministry of Finance (Kemenkeu) has officially included the rupiah redenomination policy in its 2025–2029 Strategic Plan (Renstra), as outlined in Ministerial Regulation (PMK) No. 7/2025, issued on October 10, 2025. The regulation describes redenomination as a crucial step toward improving economic efficiency and strengthening national competitiveness.
The document cites that “economic efficiency can be achieved through enhanced national competitiveness,” reflecting the ministry’s belief that simplifying the currency system could streamline transactions and improve investor confidence.
Purbaya Yudhi Sadewa Leads the Charge
Finance Minister Purbaya Yudhi Sadewa is spearheading the renewed effort. His version of the policy—referenced in PMK No. 70/2025—outlines the plan to convert Rp1,000 into Rp1, a move that would reduce the number of zeros on Indonesia’s currency notes without affecting actual purchasing power.
Purbaya emphasized that redenomination aims to promote long-term economic stability, protect citizens’ purchasing power, and strengthen the rupiah’s credibility both domestically and internationally.
Legislative Timeline and Implementation Goals
According to the regulation, the Draft Law on the Change in the Value of the Rupiah (RUU Redenominasi) will be coordinated by the Directorate General of Treasury (DJPb) and is targeted for completion by 2027. Preparations and consultations are expected to occur in phases, ensuring public understanding and economic readiness before implementation.
The redenomination effort will be part of four legislative initiatives proposed by the Finance Ministry within the medium-term 2025–2029 National Legislation Program. Other proposed bills include the Valuer Bill (RUU Penilai) and the State Asset Management Bill (RUU Pengelolaan Kekayaan Negara).
Lessons From Past Attempts
This is not Indonesia’s first attempt at redenomination. In 2013, a similar proposal—aimed at removing three zeros from the rupiah—was submitted to the House of Representatives (DPR) but was postponed due to economic uncertainties at the time. The current inclusion of redenomination in the official five-year plan signals renewed political will and a more favorable macroeconomic environment.
Challenges and Reactions
Despite its inclusion in the Finance Ministry’s roadmap, the plan has yet to gain full traction across the government. Coordinating Minister for Economic Affairs Airlangga Hartarto admitted that he had not been briefed on the new proposal, suggesting that inter-ministerial coordination remains a work in progress.
“Let’s see later; so far, there’s no plan yet,” Airlangga said during a press briefing at the Presidential Palace on November 7, 2025, as quoted by Detik.
Potential Impact on the Economy
If implemented successfully, redenomination could simplify accounting systems, reduce transaction costs, and align Indonesia’s currency format with other ASEAN nations. For businesses and foreign investors, a cleaner denomination could improve transparency and ease cross-border trade—particularly with Singapore, where 1 Indonesian Rupiah equals approximately 0.000080 Singapore Dollar.
The return of rupiah redenomination marks a significant policy revival that could reshape Indonesia’s monetary landscape. While challenges in coordination and communication remain, the move reflects the government’s ambition to modernize its currency and enhance economic efficiency. For neighboring economies like Singapore, a stronger, more stable rupiah would strengthen regional trade confidence and deepen cross-border financial integration.
Sources: Kompas.com (2025) , CNN Indonesia (2025)
Keywords: Redenomination Rupiah, Indonesian Currency, Finance Ministry, Purbaya Yudhi Sadewa, Economic Policy
