The Indonesian government has reintroduced its plan to simplify the rupiah currency through a redenomination policy, aiming to finish the laws (Denomination Law) by 2027.
This initiative is an element of the Strategic Plan of the Minister of Finance for 2025–2029, included within the Regulation of the Minister of Finance No. 70 of 2025, issued on October 10, 2025, which is officially in force from November 3, 2025.
The regulation states that “The Redenomination Act is a transfer Act scheduled for completion in 2027.”
The Directorate General of the Treasury (DJPb) of the Ministry of Finance will lead work on the draft of this law, and the regulatory framework is predicted to be accomplished in 2026.
Simplifying the currency without changing the worth
Redenomination is the means of simplifying the written denomination of a currency without changing its actual value or people’s purchasing power. Under the proposed scheme, three digits can be faraway from rupee notes. In other words, Rp 1,000 will turn out to be Rp1, while the worth of products and services will remain the identical.
The primary objectives of this policy are to enhance economic efficiency, strengthen monetary stability and increase public confidence within the rupee, each on the domestic and international levels.
The creation of the redenomination law is predicted to make sure sustainable economic development of the country, stabilize the worth of the rupee to take care of public purchasing power and improve the credibility of the currency.
Resumption of a multi-year program
The denomination plan is nothing recent in Indonesia’s economic history. The same proposal was discussed in 2010 when Bank Indonesia first floated the concept of simplifying rupiah denominations. It was included within the Priority National Legislative Program for 2013 (Prolegnas), however the discussion was postponed.
In 2013, the federal government even submitted a draft denomination bill to the House of Representatives (DPR). The bill proposed to remove three zeros from the rupee. However, the bill was shelved without further discussion.
The issue resurfaced in 2016 and 2017, but again failed because of economic and political reasons.
Now, through PMK No. 70/2025, the plan has returned as a medium-term strategic program under the Ministry of Finance’s 2025-2029 agenda, marking the revival of a long-delayed initiative that has been stalled for over a decade.
Bank Indonesia: Ready, but waiting for the appropriate moment
Bank Indonesia has previously stated that it’s technically able to perform the redenomination. In 2023, BI Governor Perry Warjiyo stressed that the central bank had prepared currency design, operating systems and policy implementation simulations. However, implementation must take into consideration stable economic and political conditions.
Perry explained: “Denomination has many economic advantages, especially by way of efficiency. By removing three zeros, economic efficiency will increase.”
He also noted that too many digits in rupee denominations decelerate transaction processes. “Without three zeros, transaction settlement will be faster,” he said.
Earlier in 2017, BI Deputy Governor Mirza Adityaswara estimated that the denomination process could take as much as ten years and that public education could be crucial to stop misunderstandings in regards to the policy and avoid the perception of devaluation.
Strategic initiatives for 2025–2029
In addition to the draft act on denomination, the Ministry of Finance may even propose three other draft acts in the identical period:
• Auction Act (implementation of the 2026 goal)
• Act on the management of state assets (implementation of the 2026 goal)
• Assessment Act (implementation of the 2025 goal)
These 4 legislative initiatives are expected to support the implementation of the Ministry of Finance’s strategic goals over the following five years.
