The Indonesian currency Rupiah which is mentioned as one of the 10 worst currencies in the world will now get a boost in its value through re-denomination. This is because the Rupiah value is so small that currency exchange with other currencies calls for a headache.
The idea of simplifying the currency has been floated before but only this time gained a bit of momentum since the movement is backed up by the Indonesian Central Bank.
The Indonesian Rupiah Will Shed Three Digits
The Central Bank Deputy Budi Rochadi says that their study regarding the re-denomination will be submitted to the President by the end of this year.
“We are considering cutting three or four digits but we have not decided it yet and still weighing the benefits and drawback of the number of digits omitted” says Budi.
The Central Bank plans to introduce the re-denomination this year with transition period from 2013 to 2015. During the transition period every mention of the currency will need to have both values. The Central Banks expect to complete the process within 10 years.
Farial Anwar a currency market analysts, agreeing with this proposal. According to him the Rupiah has so many zeroes it endangers of not being accepted when exchange outside of Indonesia.
This re-denomination will also make it easier for the Government when calculating the state budget.
Meanwhile Marwan Batubara, the Chairman of State Property Rescue Committee says that the Rupiah re-denomination is good but not a high priority at the moment. “There are other things that need the Government attention right now, for example lowering the interest rate, encourage local economic growth and fixing the Indonesian economy” says Marwan.
At the moment the lowest value currency is Zimbabwean Dollars and although Indonesian Rupiah is nowhere near that value, 1 USD is still exchanged with 4 digits of Indonesian Rupiah.
Other countries facing the same problem with their currency are Vietnam, Sao Tome and Principe, Laos, Iran, Guinea, Turkmenistan, Paraguay, and Zambia
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