Less zeros....

[Smallworld]

Finally ... my calculator is running out of zeros ...

Indonesia's central bank governor said on Monday (19/12) the bank is seeking to slash three zeroes off the face value of rupiah notes in a move to simplify it currency system.

http://jakartaglobe.id/bankingfinance/indonesia-central-bank-looks-slash-zeroes-off-currency-notes/

 

[fastpitch17]

Finally ... my calculator is running out of zeros ...



http://jakartaglobe.id/bankingfinance/indonesia-central-bank-looks-slash-zeroes-off-currency-notes/

They just printed new notes with all the zeros still there. This slashing zeros thing has been going on for years now and nothing ever changes.

 

[Anglian]

Atlantis predicted last year I think it was that some zeros would be deleted, never happened,

 

[Smallworld]

Now.... now boys you know what happened in India with their currency .... maybe Indonesia will follow the same way as India. Releasing new notes then after 1-2 months cancelling all new notes validity under the reason "they are easy to be falsified" then next 1-2 months they may release notes with cut zeros.

 

[dafluff]

Redenominating currency requires long periods od public information campaign, which as far as I can tell hasn't started yet.

At the earliest this is 1 year away, realistically much longer than that.

 

[Anglian]

Imagine the chaos if they just knocked the zeros off without telling anybody

 

[atlantis]

The cutting of the zeros is/was part of a passed Law.

However, when they (BI) started to socialized it, the fear from the people was very high and they did not pursue it, at least to my knowledge.

Though it would be a great idea, it is very difficult to get it accepted, especially from the poorest and less educated here. Having people to understand that 100 new rupiah is the same than 100.000 old rupiah, and that you need to give back in change the Rp 50.000 old rupiah note along with this Rp 20 and Rp 5.000 old rupiah notes you have in your cashier to this guy who gave you a Rp 100 new rupiah note to buy these two articles your boss has respectively priced at Rp 17.000 old rupiah and Rp 8 new rupiah, is almost impossible.
Bear in mind that unfortunately far too often, a simple operation such as 100-25 is a matter which may mobilized the whole kampung if the calculator has just died.

 

[dafluff]

If they want to do this, they should do it in 2 steps, where the first step is to issue currency with the "000" still present, but written in much smaller font. Or written as "Ribu", to get people thinking in fewer zeros. Then after a couple of years of this, they can drop the 3 zeroes.

 

[Smallworld]

OK I admit for a second I forgot I am in Indonesia. Scrap my words "months" replace it with years. Now the time frame should sound more realistic.

 

[Smallworld]

If they want to do this, they should do it in 2 steps, where the first step is to issue currency with the "000" still present, but written in much smaller font. Or written as "Ribu", to get people thinking in fewer zeros. Then after a couple of years of this, they can drop the 3 zeroes.

If they want to do it professionally then they should do it once to avoid double confusion. It should be done once only with new notes and less zeros on them.

 

[Smallworld]

The cutting of the zeros is/was part of a passed Law.

However, when they (BI) started to socialized it, the fear from the people was very high and they did not pursue it, at least to my knowledge.

Though it would be a great idea, it is very difficult to get it accepted, especially from the poorest and less educated here. Having people to understand that 100 new rupiah is the same than 100.000 old rupiah, and that you need to give back in change the Rp 50.000 old rupiah note along with this Rp 20 and Rp 5.000 old rupiah notes you have in your cashier to this guy who gave you a Rp 100 new rupiah note to buy these two articles your boss has respectively priced at Rp 17.000 old rupiah and Rp 8 new rupiah, is almost impossible.
Bear in mind that unfortunately far too often, a simple operation such as 100-25 is a matter which may mobilized the whole kampung if the calculator has just died.

My country went trough currency denomination in 1990 after hyperinflation. I do admit my grandparents did struggle to calculate as they went through few currency changes in their life time. My mum and dad on the other side were/are fine. We cut off 4 zeros. In the shops there were double prices with 0000 and without zeros. There was a broad campaign in TV, radio, newspapers. All banks were instructed, there were posters everywhere. Even in a box of matches you had a table of a new vs old currency printed on it. All people were against it as they feel cheated simply 1 000 000 PLN is (mathematically ) > 100 PLN. Here National Bank is saying 1 000 000 = 100 PLN. So if your savings were 20 000 000 PLN you had suddenly 2 000 PLN in your account. All money in banks were automatically denominated. The problem was the cash.

As for your new / old transactions and how much to give change. I don't remember to personally struggle with it. Suddenly your salary got paid in new notes (from Bank->employer). Back then all translations were cash only. When you went to the shop you paid either in old currency (people did quickly as they had nasty experience from hyperinflation, no one was trying to keep savings in their house) or new to avoid confusion of the cashier. The cashier could divide transaction (most often), pay you the change in old currency but only the smallest banknotes values were used to give change and only if the cashier didn't have new currency. This was done to avoid mistakes and cover shop losses from the cashier salary at the end of the month. Each day the business owner went to bank to exchange banknotes to pay to suppliers and salaries and to get small change to avoid cashier's confusion.

 

[dafluff]

OK I admit for a second I forgot I am in Indonesia. Scrap my words "months" replace it with years. Now the time frame should sound more realistic.

More realistic time frame: From the time DPR approves the law, it requires 2 years of preparation time, and 7 years of transition time to complete the redenomination. -Governor of Bank Indonesia.

http://m.liputan6.com/bisnis/read/2...nasi-rupiah-minimal-7-tahun?siteName=liputan6

 

[Smallworld]

More realistic time frame: From the time DPR approves the law, it requires 2 years of preparation time, and 7 years of transition time to complete the redenomination. -Governor of Bank Indonesia.

http://m.liputan6.com/bisnis/read/2...nasi-rupiah-minimal-7-tahun?siteName=liputan6

Law was approved on 7 July 1994. 22 Nov 1994 the information campaign started. 1st Jan 1995 introduction of new money.

We only operated 2 years with the old and new currencies. After 1997 you have to talk to the Bank directly if you want to exchange your money. You were allowed to do it till end of 2010.

 

[atlantis]

Each day the business owner went to bank to exchange banknotes to pay to suppliers and salaries and to get small change to avoid cashier's confusion.

We are living in a country were about 170 millions people do not have a bank account and are not used to deal with banks.
Around me, very few people have ever entered a bank or have ever used an ATM. In fact, save for my friends who are wealthy and educated the banking system is something to stay away from.

 

[Smallworld]

We are living in a country were about 170 millions people do not have a bank account and are not used to deal with banks.
Around me, very few people have ever entered a bank or have ever used an ATM. In fact, save for my friends who are wealthy and educated the banking system is something to stay away from.

Back then majority of workers didn't have bank accounts. One more .... there is vast workforce of people in Indonesia which works for government, military, police and other state owned companies PLN, pertamina ect. it will be easier to distribute cash via them as they have to comply with government regulations. We have a similar situation back then when some companies where state owned. All the third party companies working with/under the government companies will have to comply with new requirements.

As for your wealthy friends my guess ( I hope I am right) is they don't keep all their savings in cash, do they? More likely they would have gold, gems or something similar.
If they would keep their savings in cash to avoid tax, not trusting banking sector ect.... you still will have to comply with what the government will decide is "best for you" right?
So if the government will say for eg. all old banknotes are valid till 2020 ... and after this you have 5-10 years to exchange but only in Banks.... what will your friends do? Sulk and keep their cash under their beds? Or exchange in a Bank?

As for 170 mln population yes I agree the whole operation is about 5 times bigger. The most important is the information campaign.

 

[Nimbus]

The most practical way that prevents error and confusion is by renaming the currency. Call the new one 'Uang' or something like that. The first Indonesian currency was actually ORI (Oeang Republik Indonesia). In today's spelling that would be URI, or since they started using the phrase Negara Kesatuan Republik Indonesia again, it can be UNKRI.

URI and UNKRI are not catchy, perhaps 'Perak' can work. So, 1000 Rupiah = 1 Perak.

 

[Vanuatu]

The most practical way that prevents error and confusion is by renaming the currency. Call the new one 'Uang' or something like that. The first Indonesian currency was actually ORI (Oeang Republik Indonesia). In today's spelling that would be URI, or since they started using the phrase Negara Kesatuan Republik Indonesia again, it can be UNKRI.

URI and UNKRI are not catchy, perhaps 'Perak' can work. So, 1000 Rupiah = 1 Perak.

That would make some transactions easier so 300 Perak equals one Perek

 

[Asun]

That would make some transactions easier so 300 Perak equals one Perek

Where can I find deals like that? For market research purpose of course.

 

[R Cameron]

I'm of the opinion the transition could happen pretty smoothly if they just pushed it ahead. I've already seen many, many places from tiny warungs to fancy resturaunts that drop three zeros, sometimes using a K (15K) and sometimes not. 95% of the time I ask for a price it's told to me without the "ribu", just "dua lima", "dua ratus tujuh pulu", etc.

If they kept the money looking exactly the same (especially the color) I don't think the bill handling would hardly phase anyone.

Anywhere an amount is printed (receipts, bank balances, printed price tags, etc) they could simply use 3 decimal places to help overcome the mental barrier so 31.500 simply becomes 31,500 on a price tag and a bank balance goes from 6.450.000 to 6.450,000. Over time people will realize two of the decimal places are redundant and start eliminating them in use, but that can happen at whatever pace comes naturally without any need to change money or financial systems.

 

[Zavia]

I do support using k, and later dropping it.
With 000s it still is million/juta.
With k, and a media campaign where people do not mention thousand,k or ribu (including talking to all the tv show script writers) people will eventually go from 100ribu to 100k.
Then later release a new series of notes without k once the 100,000 notes are expired/out of circulation.