Go ahead with redenomination

Go ahead with redenomination
10th August 2010
http://www.thejakartapost.com/news/2010/08/10/letter-go-ahead-with-redenomination.html

I am quite surprised by the contents of the letter of Rajesh (Aug. 9) and his opposition to redenomination of rupiah.
But before I write anything on the subject, let me narrate a real conversation with my Italian friend.
When I first met him after the Euro became the day-to-day currency of most of the countries in EU, I asked him if he mourns the end of their lira and whether the traders took advantage of this change to hike up the prices.
I was surprised by the vehemence in his reply, “No, not at all! We were fed up of the zeroes in lire and feel ‘liberated’ now.” And fortunately no inflation (or chaos) has resulted due to the change in currency.
Rupiah which makes anybody and everybody a (pseudo) millionaire in no time is overdue for a demonetization. Whether to strike off three zeroes to make it close to US$10 or four zeroes to bring it at par to US dollar is a matter of convenience of the authorities and people.
Really speaking, rupiah has maintained its strength quite well in the last few months.
Whatever alternate actions to demonetization, Rajesh has suggested have merits of their own, but demonetization will not come in their way. What is the new cost? Just start printing new banknotes with new denominations and withdraw the old ones over a period of time. I don’t think there is a major cost involved.
May be demonetization will bring out some stashes of unaccounted wealth in cash form from the safes of innumerable people and help the treasury branch to extract some unpaid income taxes.
So Indonesian government should go ahead full steam!
K.B. Kale, Jakarta