Ordos Posted May 31, 2014 Share Posted May 31, 2014 I've heard that we here in Indonesia are going to start counting our money differently. The inflation rate is stable and the value remains the same but our currency the Rupiah is about to lose three zeros. This does not mean much for economics but it will mean we here will have to start doing our math differently when adding up our bills. It means single and double digit money will make a comeback in this country. We have not seen it since the 1950s when we still had cents! Here is roughly the current exchange rate with the US dollar: 1 000 000 Rupiah = 100 US dollars 100 000 Rupiah = 10 US dollars 10 000 Rupiah = 1 US dollar 1000 Rupiah = 10 US cents With the slashing of the zeros it will look like: 1 000 Rupiah = 100 US dollars 100 Rupiah = 10 US dollars 10 Rupiah = 1 US dollar 1 Rupiah = 10 US cents What does this mean? Well it will mean we will all have to take out our ballpoint pens and slash off 3 zeros on our old cash before the bank prints new bills. We will have to re-define what is a lot of money and what is a little. A lot less loose change and/or coins can become a lot more useful because they add up faster. It will take some getting used to. The zeros will come back in time with inflation. They slashed off zeros in Zimbabwe but with the hyperinflation the zeros just came back at a faster rate. This was of course before their currency died. But that's not happening here as inflation is stable. Link to comment Share on other sites More sharing options...
Inigima Posted May 31, 2014 Share Posted May 31, 2014 Uh... I'm no economist, but that doesn't seem especially viable. Link to comment Share on other sites More sharing options...
The Marquis de Leech Posted May 31, 2014 Share Posted May 31, 2014 Oh, it's perfectly viable. Revaluations happen all the time. This one just seems to be for aesthetic reasons though. I hope the new notes look substantially different from the old ones. Link to comment Share on other sites More sharing options...
Errant Bard Posted May 31, 2014 Share Posted May 31, 2014 It was done in France in 1958, we managed well enough, it's totally viable. We did it for the Euro some 40 years after too (changing for a currency with a different facial value), and it worked, likewise. Of course, though, it implies issuing currency different from the old one, and a period of double currency. Link to comment Share on other sites More sharing options...
The Drunkard Posted May 31, 2014 Share Posted May 31, 2014 Why three, do you know? Four seems simpler, just have it align with the US. Link to comment Share on other sites More sharing options...
Inigima Posted May 31, 2014 Share Posted May 31, 2014 You can just... declare that your currency is worth more now? Well, okay. Link to comment Share on other sites More sharing options...
Errant Bard Posted May 31, 2014 Share Posted May 31, 2014 You can just... declare that your currency is worth more now? Well, okay.It's not like it changes the value of your assets. Those who have 1000 old-currency will, converted, only have 1 new-currency. Your house worth 100.000.000 old-currency will be worth 100.000 new-currency. It's not rocket science. Link to comment Share on other sites More sharing options...
Inigima Posted May 31, 2014 Share Posted May 31, 2014 Oh, right, that makes sense. Link to comment Share on other sites More sharing options...
natty bumppo Posted May 31, 2014 Share Posted May 31, 2014 With a million Rupiah worth just 100 US Dollars people must be dealing with very large numbers. Not good. In my experience very few people really understand the meaning of say a billion. That's why state finances are ... in the state they are in. To the public, a million, a billion, and a trillion are all the same. Probably to most politicians too. So, slashing those zeros is definitely a good idea. it brings prices down to levels people can grasp. Link to comment Share on other sites More sharing options...
Errant Bard Posted May 31, 2014 Share Posted May 31, 2014 Four seems simpler, just have it align with the US.It's probably not done thinking the US is the reference. Would not suprise me if they used the most basic food item (say, a loaf of bread) and tried to have it be worth 1 new money. Link to comment Share on other sites More sharing options...
Ser Scot A Ellison Posted May 31, 2014 Share Posted May 31, 2014 Inflation is nothing ro worry about. Nothing to see here. Move along... move along.:rolleyes: Link to comment Share on other sites More sharing options...
Solmyr Posted May 31, 2014 Share Posted May 31, 2014 Happened in Bulgaria about 15y ago, worked out just fine. Link to comment Share on other sites More sharing options...
ants Posted May 31, 2014 Share Posted May 31, 2014 Why three, do you know? Four seems simpler, just have it align with the US.Just guessing, but I'd say that probably the 1000 note is probably being used as the smallest note now, so they want that to become the equivalent of 1 in the new system. Link to comment Share on other sites More sharing options...
WinterKing Posted May 31, 2014 Share Posted May 31, 2014 It happened in Brazil like 4 or 5 times in the 80's and 90's,when we had hyperinflation.Nothing really changed. Link to comment Share on other sites More sharing options...
Ordos Posted May 31, 2014 Author Share Posted May 31, 2014 I will have to come up with a kind of technique to remind myself (a slap on the face perhaps) that the math has changed when I'm adding up my utilities bills or coming up with my household budget. Link to comment Share on other sites More sharing options...
baxus Posted May 31, 2014 Share Posted May 31, 2014 It happened here in Serbia a few times per year in the early '90s :lol: We had hyper-inflation at the time due to all the economic sanctions our country was under at the time.Those times are long gone, but I still remember new bills getting printed every once in a while. Link to comment Share on other sites More sharing options...
Ordos Posted May 31, 2014 Author Share Posted May 31, 2014 It happened here in Serbia a few times per year in the early '90s :lol: We had hyper-inflation at the time due to all the economic sanctions our country was under at the time. Those times are long gone, but I still remember new bills getting printed every once in a while. Was it like a yoyo? The zeros coming back and disappearing every 3 months or so? Link to comment Share on other sites More sharing options...
Roose Seal Posted May 31, 2014 Share Posted May 31, 2014 Yeah they did it with the Franc several decades before the € and it didn't really change anything, it was purely for practical reasons. The funny thing is that old people still talk in "ancient francs" even after all this time.grandpa: "that house must be worth 100 million"me: "..... . OH, you mean 150K€" Link to comment Share on other sites More sharing options...
White Walker Texas Ranger Posted May 31, 2014 Share Posted May 31, 2014 It's not a big deal as long as there's no hyperinflation. If there is hyperinflation, then that's the least of your problems. Link to comment Share on other sites More sharing options...
baxus Posted May 31, 2014 Share Posted May 31, 2014 Was it like a yoyo? The zeros coming back and disappearing every 3 months or so? Yeah, it was. At one point, we had this banknote in circulation. That's the deal with hyperinflation, your currency is worth shit ! And 30 minutes later, it's worth even less. ;) Link to comment Share on other sites More sharing options...
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