Former finance minister Fuad Bawazier has expressed his support for Bank Indonesias intention to redenominate the rupiah, saying that it would increase the currencys prestige.

The low exchange rate of the rupiah against the US dollar, compared to the currencies of neighboring countries like Malaysia, Singapore and Thailand, had caused a negative perception of the currency and the Indonesian economy, said Fuad on Wednesday at a discussion in Jakarta.

If the rupiah exchange rate is low, the country is perceived as being poorly managed, said Fuad as reported by tribunnews.com.

Earlier, Bank Indonesia governor Agus Martowardoyo had called on lawmakers to start deliberating the redenomination bill, citing the current good economic condition for redenominating the rupiah. The plan intends to issue smaller denominations of the rupiah.

The government has expressed its support of the central banks plan, with President Joko Jokowi Widodo instructing Finance Minister Sri Mulyadi Indrawati to carry out a comprehensive study on the rupiah redenomination plan with Bank Indonesia.

Fuad said the redenomination plan would not receive public rejection, even from the business community, because it had already occurred technically: many shopping outlets, restaurants and cafes had eliminated the final three zeroes to the right of the thousands separator on their price tags and menus.

On menus, we often see @40 and @100 that indicate Rp 40,000 and Rp 100,000, he said, adding that the public would not find it difficult to adjust to the redenominated rupiah.

Source : The Jakarta Post

Nov 25, 2017