Dion Bisara – Indonesia is one step closer to slashing a number of zeros from the rupiah after the government on Tuesday said it would submit a currency redenomination bill to the House of Representatives by next year.

Redenomination is a process whereby a new unit of currency replaces the old. The most common way of achieving this is to remove three zeros from the old currency. For example, Rp 1,000 will be Rp 1 in the future.

"The redenomination plan is now in the harmonization stage," Finance Minister Agus Martowardojo told journalists on Tuesday.

Agus said the harmonization of the bill with other laws and regulations was being undertaken by the Ministry of Justice and Human Rights. He said the redenomination process would take five to ten years to implement.

"We will take examples of the nations that have successfully implemented redenomination, as well as taking lesson from those that failed," he said.

Bank Indonesia has introduced higher-denomination bills five times since 1964. The Rp 100,000 note is now the second-highest denomination banknote after Vietnam's 500,000 dong note, which is worth about $26.