17 September 2009

Will This Cause Inflation?


There is a bit of concern that the introduction of the new 2000 rupiah note will lead to inflation as merchants jack up their prices with a view to not having to give change. However, these concerns have been dismissed by the Finance Minister, Sri Mulyani Indrawati, as "theoretically impossible".

I have been hearing that the notes are pretty popular in the lead up to the Idul Fitri (Eid ul-Fitr) celebration. Indonesians tend to give crisp new notes as gifts to young children in recognition of the end of the fasting month.

There is a press release on the currency release here (in Indonesian).

3 comments:

H. Nizam said...

Many people said yes, especially after the Rp 1.000,- is getting scarce(+ dirtier) and will be withdrawn.

Rob Baiton said...

Harry...

As I noted, the Minister does not seem to think that it will have any major impact on inflation.

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