LUCTOR E. TAPIHERUDirector

Currency Management Department - Bank Indonesia

International Seminar on Currency Management Systems, Yogyakarta, September 26th 2017

EVOLUTION OF BANKNOTE DESIGN: AN INDONESIAN CASE

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I. Introduction

II. Indonesia’s Currency System

III. Design for Rupiah Old Series

IV. Issuance of 2016 Series

V. Lessons Learned

VI. Challenges Ahead / Next Step

AGENDA

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The Mandate

To satisfy the public needs of Rupiah currency according to the nominal value as well as denomination, timely and of the high quality of currency throughout the archipelago.

1 2 3 4 5 6

Coordination with

Government

PLANNING(Art. 13)

PRINTING(Art. 14)

ISSUANCE(Art. 15)

CIRCULATION(Art. 16)

DESTRUCTION(Art. 18)

REVOCATION& WITHDRAWAL

(Art. 17)

Mandate from Currency Act :

To satisfy the public needs of Rupiah currency according to the nominal value as well as denomination, timely and high quality of the currency throughout the archipelago.

I. Introduction

Act No. 23/1999 regarding Bank Indonesia Act No. 7/2011 regarding Currency

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I. IntroductionIndonesia at a Glance

Economic Condition (2016)

• Growth: 5.02%• Inflation: 3.02%• GDP : $923

billions

Network

• BI Headquarter

• 46 BI Branches

• 87 Cash Custodies

Currency in Circulation

2016• Rp612.5 trillion• Banknotes: 17 billion • Coins:

20 billion

Notes & Coins Printing

2016• Banknotes:

8.5 billion• Coins:

2.0 billion

Geographic and Demographic Condition

• Total Island: 17.504• Island inhabited:

±6.000 • Population: >261

million

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I. Introduction

VIDEO KEINDAHAN ALAM INDONESIA

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II. Indonesia’s Currency System

Currency in Circulation

0%

5%

10%

15%

20%

25%

0

100

200

300

400

500

600

700

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

% UYDRp. triliun CiV CoB % UYD, yoy

0

100

200

300

400

500

600

700

800

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3

2014 2015 2016 2017

Rp. triliunUPK UK 20000 UK 50000 UK 100000

Currency in Indonesia consist of :- 7 banknotes (Rp100.000, 50.000, 20.000, 10.000, 5.000, 2.000, 1.000)- 4 coins (Rp1.000, 500, 200, 100)

Currency in Circulation - value: Rp612,5 trillion (as of Dec 2016)- 17 billion banknotes and 20 billion coins

Source: Bank Indonesia, 2017

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II. Indonesia’s Currency System

Currency in Circulation – Comparison with Other Countries

NegaraCAGR*)‘04-15

Projection next 10 years

Growth Rates

Pop. Growth

HK 8,4% 91% 90%

SIN 7,2% 73% 46%

KOR 12,1% 33% 31%

INA 14,9% 99% 93%

THA 10,3% 122% 117%

PHI 10,9% 113% 111%

Source: AGIS Consulting (The Future of Cash An Asian Perpective 2017)

In value, cash in circulation has grown at the compound annual growth rate of 15% over the period of2005-2015.

The growth in Indonesia is quite high compare with our neighbouring countries.

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III. Design for Rupiah Old Series

1945• Japanese (Dai Nippon),

• Dutch Indies (Gulden),

• De Javasche Bank

1946• ORI (Oeang

Repoeblik Indonesia) Series

1950• Republik

Indonesia Serikat (RIS) Series

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1953 • Culture Series

1959 • Animal Series

III. Design for Rupiah Old Series

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1960 • Flower and Bird Series

1961 • Handicraft Series

III. Design for Rupiah Old Series

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1964-1968

• Soekarno series

1968 -1975

• Soedirman series

III. Design for Rupiah Old Series

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1979 -1999

2000 -

2016

III. Design for Rupiah Old Series

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IV. Issuance of 2016 Series

Architecure of Strategic Function of BI

Background and Policy Context

TURNING POINTS

Established Centralized Cash

Network Planning

END STATE

(Objective)

High-quality of all denominations of Rupiah banknotes

throughout the archipelago

CURRENT STATE

(Challenges)

Design is not comply to Currency Act

Low quality of currency in circulation

Limitation of cash network and coverage

Standard for cash processing for CiT/CMC

Vault capacity Availability of sorting machine

Board of Governor announced the Transformation Program of Bank

Indonesia in 2014, particularly transformation in currency

management determined in 3 pillars: Enhanced Quality of of Rupiah, Currency Circulation, and Cash

Services.

TRANSFORMATION FRAMEWORK

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Previous banknotes and coins did not comply to Currency Act

The effectiveness of blind code needs to be enhanced.

The effectiveness of current security features need to be enhanced

Consider the redenomination policy in the future

Theme, design and lay out are not STANDARD

Main Issues in Rupiah Notes and Coins

IV. Issuance of 2016 Series

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What to Consider in Design Process

IV. Issuance of 2016 Series

Material/Substrate

Theme/

Picture

Design Aesthetic

Security Features

• Same theme for all denominations

• Avoid public controversy

• Consider Property Right

• Easy to verify

• Difficult to counterfeit

• Durable

• Easy to apply

• Cost effectiveness

• Durability

• Security

• Cost Effectiveness

• Public behavior in handling cash

• Color selection

• Banknotes/Coin Size

• Design Layout

16Link to Movie

Denomination Old Series Design Theme

Rp100.000 (2004)

Indonesian Parliament Building

Rp50.000(2005)

View of Beratan Bedugul Lake

Rp20.000(2004)

Tea Harvesting Activities

Rp10.000(2005)

Limas Traditional House

Rp5.000(2001)

Traditional Knitting/Weaving Activities

Rp2.000(2009)

Dayak Dance

Rp1.000(2000)

View of Maitara –Tidore Island

Rupiah Old Series wasissued with differentdesign/theme for eachdenomination.

IV. Issuance of 2016 Series

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• Research

• Decision to Issue New Series

Sept 2015

• Board of Governor meeting

• Coordination with Government

Nov - Dec 2015

•Collecting Data

•Design Phase

•Procurement

Jan – Jun 2016

• Zero Production

• Communication strategy

Jul – Sep 2016• Mass production

• Machine Calibration

• Distribution

Oct – Dec 2016

• Issue new Rupiah Series 2016

19 Dec 2016

Preparation Phase for Issuing Rupiah Series 2016

IV. Issuance of 2016 Series

Launch 7 banknotes + 4 coins at one time

Less than 1,5 year preparation

Communication Issues

Achievements

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Public, Expert, Prominent Figures, Associations,

Families

Government of Indonesia

Perum Peruri(Printing Co)

Law Enforcement Agency

IV. Issuance of 2016 Series

Who We Coordinate With

Retailers, Machine suppliers, Financial Institutions

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IV. Issuance of 2016 Series

Design Front Side: Indonesian National Hero

The inclusion of National Hero image in Rupiah is mandated by Currency Act as a tribute to their patrioticand heroic as well as their extraordinary services for the Indonesian state and people.

Bank Indonesia coordinates with Government of Indonesia, historian, scholars and experts to selectNational Hero with criteria as follows: the image never been depicted in previous Rupiah series,represent all Indonesian area, and fully accepted by public.

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IV. Issuance of 2016 Series

Design Rear Side: The Beauty of Indonesia

Derawan

Bromo Mountain

Banda Neira

Raja Ampat

Wakatobi

Komodo Island

Ngarai Sianok

Consists of over 17,000 unique islands, Indonesia's archipelago proudly exhibits natural beauty that isunique and promote the uniqueness of Indonesian tourism.

Bank Indonesia coordinates with Ministry of Tourism and experts to select beautiful places thatrepresent Indonesian natural wonders.

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IV. Issuance of 2016 Series

VIDEO TARIAN TRADISIONAL INDONESIA

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IV. Issuance of 2016 Series

Design Rear Side: Indonesian Traditional Dance

Tari Gong

Tari Gambyong

Tari TifaTari Pakarena

Tari Legong

Tari Piring

Tari Topeng Betawi

Indonesian traditional dance reflects the diversity of culture from ethnic groups thatcomposed the nation of Indonesia.

Bank Indonesia coordinates with Ministry of Education and Culture, scholars and experts toselect traditional dances that will represent Indonesian rich culture.

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IV. Issuance of 2016 Series

Rp100.000Raja Ampat

(West Papua)

Dr. (H.C.) Ir. Soekarno

(1901-1970)

Dr. (H.C.) Drs. Mohammad Hatta

(1902-1980)

Traditional Dance

Topeng Betawi (Jakarta)

Watermark

Signatures of Governor

and Minister of Finance

Total changes on the design

In the new series of Rupiah, we had totally changed the design. We used Indonesian nationalheroes as main image and captured the cultural heritage of Indonesia, such as: our traditionaldance, national scenery, floral and fauna, that represent all parts of Indonesia.

VIDEO LAUNCHING UANG RUPIAH TE 2016

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BI’s Governor firstly used Rupiah

series 2016 in the local market

President Jokowi, BI Governor, and

Minister of Finance launched 2016

Series

Link to Movie

People in Papua (remote area) has the

new Rupiah Series 2016

Public can easily get the new

2016 series

IV. Issuance of 2016 Series

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IV. Issuance of 2016 Series

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Total changes and the common

design for all denominations.

Comply the Currency Act, such as:

The main pictures are national

heroes

Under signed by Ministry of

Finance and Governor of Bank

Indonesia

Using existing substrates/blanks

Enhanching existing security

features (such as: flourosencent,

rainbow, IR, OVI, laten image,

rectoverso)

New Series of

Rupiah ?

Enhanching blind code features

Consider possibility of the

implementation of

Redenemination Policy

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19 December 2016The first currency issuance in Indonesian history

that launched New Series of Rupiah with 11 (denominations) at one time.

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V. Lessons Learned

What We Have Learned??

• Uniformity in design/theme

• Security feature robustness

• Counterfeit deterrence

• Preparation Stages is Crucial

• Stakeholder Engagement

Project and Coordination

Product

OperationCommunication

• Comm. Strategy• Multi channel

Media (Internet, Youtube, Posters, Brochure)

• Production schedule w/ Peruri

• Timely distribution

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VI. Challenges Ahead

Challenges...

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2

Enhance public awareness to security features

Increase law enforcement against counterfeiters

3 Enhance durability and quality of banknotes and coins in circulation

4 The possibility of REDENOMINATION’s policy

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THANK YOU

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Bank Indonesia

Jln. MH. Thamrin No. 2Jakarta 10350 - Indonesia

www.bi.go.id

THANK YOU