Indonesia Finance Minister signature on new banknotes

Indonesian Legislators approved the governments’ request to add Indonesia Finance Minister signature on new banknotes during the final debate at House Commission XI overseeing financial affairs on Tuesday. The government and the House of Representatives have finally agreed to pass the currency bill for final approval at the House plenary session next week, despite criticism from a central bank deputy governor. The finance minister will begin signing the banknotes on the 69th anniversary of the Independence Day on 17 August 2014. The currency bill has been delayed several times already due to prolonged debates on the additional signature.

Photo: Indonesia Finance Minister Agus Martowardojo

However, contrary to his institution’s stance, Bank Indonesia (BI) deputy governor for payment systems, Budi Rochadi, made a controversial statement on Monday, saying that the government would have to hold certain responsibilities if it signed the nation’s banknotes. BI is the nation’s monetary authority in charge of money circulation in the country, from designing and printing to issuing notes.

“The current concept of the currency bill has deviated, taking into account unimportant matters, for example the signing of the rupiah notes by the government through the finance minister,” Budi Rochadi said as quoted by detikfinance.com.

Finance Minister Agus Martowardojo, however, said the central bank’s bank note authority would remain the same and that the government’s signature would ensure its “guarantee” that it was indeed Indonesia’s money.

“The government’s signature implies that, if people do not believe, it is the guarantee that the money is official Indonesian money,” he told reporters before a meeting with House Commission XI, which deliberated on the bill with the government.

Budi, however, questioned the deliberation, as BI was never included despite the institution’s authority in issuing money. Answering Budi’s concerns, Agus said that President Susilo Bambang Yudhoyono had officially assigned the Finance Ministry to deliberate on the bill with the lawmakers.

BI’s official stance, Agus added, reflected the government’s. “BI has confirmed something that has been agreed upon, for the government to represent it in the deliberation of the currency bill, because the Finance Ministry has been mandated by the President.”

“Pak Darmin [BI Governor] has issued a letter, saying that there is no problem in the bill. The only concern is about redenomination, which will be regulated in one specific, separate law,” Agus said, indicating that Budi’s statements did not match the central bank’s official stance.

Both the government and the House agreed last year to not include the central bank’s redenomination plan, which would cut several zeros from the rupiah, in the currency bill.

With the government’s signature on banknotes, concerns arose that if the central bank and government were ever at odds in a time of crisis, for example in printing more money for public circulation, potential debates would hamper the issuance.

“The government will respect the authority of the monetary regulator,” Agus assured.

Harry Azhar Aziz, vice chairman of Commission XI, said the decision was final and a plenary session had been scheduled for Thursday, May 31, to pass the bill.

Another notable point in the bill includes a life prison sentence for counterfeiters, he added.

Source: The Jakarta Post.