Indonesia’s finance ministry is drafting a new bill to redenominate the rupiah, part of efforts to boost economic efficiency, maintain financial stability, and strengthen the credibility of Southeast Asia’s largest economy.
According to a ministry regulation reviewed on Saturday, the Bill on Redenomination is a carryover from earlier proposals and is scheduled for finalization in 2027. The plan, long discussed but repeatedly delayed, would remove several zeroes from the national currency — though officials have not yet disclosed how many digits would be cut this time.
The last attempt to implement such a reform was in 2013, when the government proposed trimming three zeroes from rupiah banknotes. The draft was shelved amid political transitions and concerns about potential confusion in financial systems.
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Redenomination does not change the currency’s value but simplifies transactions, accounting, and pricing structures. Economists say it often serves as a signal of macroeconomic confidence — a move to showcase policy discipline rather than a response to hyperinflation.
The new plan comes as President Prabowo Subianto marks one year in office with strong public backing despite a turbulent first year marked by protests and economic challenges. A new survey by Indikator Politik Indonesia showed Prabowo’s approval rating at 78%, only slightly lower than the 80.9% recorded in January.
“Based on our national survey, the variable that makes the public most satisfied is eradicating corruption,” said Burhanuddin Muhtadi, head of the polling organization.
He noted that respondents also praised Prabowo’s social welfare programs, particularly his flagship free-meals initiative for schoolchildren.
However, the programme has faced logistical and health concerns. As of October 29, more than 15,000 children were reported ill after consuming food supplied under the initiative, prompting calls for tighter oversight and improved quality control.
The survey, conducted between October 20 and 27 with 1,220 respondents, found Prabowo scored highest in security at 56.5%, and lowest in political satisfaction, at 31%. About 20.8% of respondents expressed dissatisfaction overall.
Prabowo, a former special forces commander who took office in October 2024 after winning a landslide election, campaigned on promises to eradicate corruption and raise annual GDP growth to 8% from the current 5%. But the economy has proven more resistant than expected.
Indonesia’s GDP grew 5.04% in the third quarter, down from 5.12% in the previous quarter, as household spending — which accounts for more than half of total output — slowed slightly. Despite multiple stimulus packages and interest-rate cuts this year, investor sentiment has remained subdued, and the government’s 5.2% annual growth target appears increasingly difficult to achieve.
“This is an input for Prabowo’s government, that satisfaction has not been contributed by economic factors,” Muhtadi observed.
The president’s broader reform drive, including the planned redenomination, forms part of his bid to project economic strength and streamline public finance. But his administration has also drawn controversy for formalizing the military’s expanded role in civilian governance.
Rights groups have criticized the growing involvement of soldiers in administrative and civilian duties such as managing local departments and producing medicines, warning that the practice risks eroding democratic oversight.
Still, Prabowo’s popularity remains resilient, buoyed by perceptions of firmness and anti-corruption zeal. The redenomination effort, if executed smoothly, could become another symbolic pillar of his economic reform agenda — one aimed at simplifying Indonesia’s monetary system while reassuring investors that the government remains committed to financial stability.
However, the country still stands at a delicate juncture of balancing ambitious reforms with the need to revive confidence in an economy that has yet to meet its growth promise.