$10,000 note withdrawn - is it going up in value?

[PNGMK]

The highly prized $10,000 note is no longer in printing. (The tool of trade for bribers in Jakarta - http://www.thejakartapost.com/news/2014 ... ation.html)

I suspect the note is already worth more than face value.

Any ideas?

[zzm9980]

Things like this will not appreciate much in value unless in mint condition and until they're quite rare. Even then, it will only be sentimental value. No one is going to buy them in quantity just for the convenience over a $1000 note.

[Strong Eagle]

The gahmen has stated that it will remain legal tender indefinitely... something that the Indonesian authorities probably didn't want to hear.

And, this will affect the value of the note. Had a deadline been set to cash them in or lose the value altogether, the numbers of notes in circulation would have dropped dramatically, thereby raising collector value substantially.

But, with all notes still in circulation, there's not much reason for appreciation, especially as all those Indonesian generals and politicians and going to bring brown paper bags full of $10,000 notes back into Singapore for deposit.

[JR8]

Biggest bank-note in IDR is = S$10.50
I suppose the IDR needs to cater to the many poor for whom perhaps a S$1 (equiv) a day might be enough to get by on. What need for a local equivalent of SGs big bills? Issuing say IDR 1 million bills (about S$100) might be practical, but all those zeroes tend to broadcast to world that the local economy is buggered. In such a case it can come down to national pride. Maybe in this case Indon would like SG to withdraw the S$10k to spare their own economic inadequacy, and blushes?

[i]'2014 – Redenomination
Indonesia's Central Bank has announced that the rupiah would be redenominated by removing three zeros starting 2014. The existing rupiah will be phased out by the end of 2018. During the transition period, the old and new currency notes will stay valid. As of August 2013, the plans are delayed or on hold recently because of other monetary problems gaining higher priority like inflation and foreign divestment.'
http://en.wikipedia.org/wiki/Indonesian_rupiah

[zzm9980]

And, this will affect the value of the note. Had a deadline been set to cash them in or lose the value altogether, the numbers of notes in circulation would have dropped dramatically, thereby raising collector value substantially.

The collector value would still be substantially lower than S$10,000 once the deadline expire.

[i]'2014 – Redenomination
Indonesia's Central Bank has announced that the rupiah would be redenominated by removing three zeros starting 2014. The existing rupiah will be phased out by the end of 2018. During the transition period, the old and new currency notes will stay valid. As of August 2013, the plans are delayed or on hold recently because of other monetary problems gaining higher priority like inflation and foreign divestment.'
http://en.wikipedia.org/wiki/Indonesian_rupiah

This is pretty much de-facto in Indonesia now anyway. As long as I've been visiting I've seen a number of shops drop the last 3 000s in posted prices anyway. Your change rounded to the nearest thousand, etc.

[JR8]

This is pretty much de-facto in Indonesia now anyway. As long as I've been visiting I've seen a number of shops drop the last 3 000s in posted prices anyway. Your change rounded to the nearest thousand, etc.

Good point, I'd forgotten about that. It certainly commonly applies on restaurant menus, and price tags in shops.

I was trying to recall what the Indon visa-on-arrival looks like, whether the government write the figure out in full. You'd have thought they had no choice eh? Er no, I forgot, it's charged in US$

[zzm9980]

This is pretty much de-facto in Indonesia now anyway. As long as I've been visiting I've seen a number of shops drop the last 3 000s in posted prices anyway. Your change rounded to the nearest thousand, etc.

Good point, I'd forgotten about that. It certainly commonly applies on restaurant menus, and price tags in shops.

I was trying to recall what the Indon visa-on-arrival looks like, whether the government write the figure out in full. You'd have thought they had no choice eh? Er no, I forgot, it's charged in US$

USD, and it just went up in price. $35USD for 30 day single-entry. Or if by ferry, $15 USD for 7 day single entry only valid for Riau (Batam).

Oh, and the posted exchange for that 35USD was something ridiculous like 53SGD.

[zzm9980]

Oh and don't forget the 200,000 (200 Rp? ) Airport "exit" tax that they must charge and collect separately from the ticket for some reason....

[Wd40]

Biggest bank-note in IDR is = S$10.50
I suppose the IDR needs to cater to the many poor for whom perhaps a S$1 (equiv) a day might be enough to get by on. What need for a local equivalent of SGs big bills? Issuing say IDR 1 million bills (about S$100) might be practical, but all those zeroes tend to broadcast to world that the local economy is buggered. In such a case it can come down to national pride. Maybe in this case Indon would like SG to withdraw the S$10k to spare their own economic inadequacy, and blushes?

The reason biggest IDR note is worth S$ 10.50 is to prevent black money, corruption and Money laundering. India too, biggest note is Rs 1000 worth S$20, for the same reason. In India, if you want to deposit more than S$1000 worth in cash you need to produce your tax identity card.

Even the US, biggest note is $100 and in Britain it is GBP 50. There is no reason to have S$1000 note leave alone S$10000. The Indonesians authorities' concerns are very valid.

BTW, if you think about purchasing power parity, how far will the GBP 50 bill get you in London v/s the biggest IDR note in Jakarta? May be twice-thrice as much more, but not 10 times more as the exchange rate suggests.

[JR8]

Bill size doesn't seem to change anything. After all you can just use a foreign currency. A wad of 'Benjies' (US$100 bills) in a music video suggests wealth, with a sub-text of it not always being legally earned. It is a parallel currency in maaany places from San Salvador to Saigon. Euro 500 bills were the medium of choice for dodgy dealing in the E-zone... I don't know if I ever had one when living there, maybe once. In fact even a E100 note was enough to make most retailers blink.

There are larger notes than US$100 in the US, though AFAIK they are not in general circulation. In the UK you're correct, the £50 is as big as it gets AFAIK; and I've certainly NEVER seen anything larger. Truth be told it can be a nuisance especially if you're buying something big, like a car, for cash, or putting down the up-front funds (say 2.5mos rent) to rent a London flat, that has to be paid in cash. Transactions with deadlines like that won't wait for any slower medium of payment.

It must be noted though the £50 note is a very desirable note to forge. That's why the design is changed quite frequently, plus all the mega security features. There are periods of time that might last years when you have to check your change pretty carefully. I've been handed fake £20s in my change in London, and even £5s.... once or twice even in M+S!? There was also a period when there were a lot of fake £1 coins, and you always briefly checked change for the tell-tale signs; they're not hard to spot if you care to look.

I wonder if Indon is afraid of larger bills being counterfeited. On the face of it the bills don't look particularly high security, I imagine adding such features comes at a cost.

Meanwhile their government itself collects some taxes in US$, and that doesn't convey much confidence in the value of the Rupiah. And 'black money' transactions can be exchanged in gold, S$, US$, Eur .... etc etc. So it would appear a pipe-dream that SG withdrawing the S$10k note would change anything for the Indons. But I'm sure they managed to offend quite a few SGn top-brass with the silly suggestion...

[Wd40]

You are right, counterfeiting is also one of the reasons why denominations are kept low.
Regarding visa fees mentioned in US$, I think its normal, since this is collected from foreigners. Now, if the government asks locals to pay taxes in terms of US$ then its a different matter.

$10,000 bills does make the job of the "bad guys" much easier. Imagine 1 wad of $10000 bills is worth more than 20kgs of gold.

[JR8]

It's collected from a lot of people who don't use US$ at all. In fact it's a PITA, as when we go to ID I'm usually scrabbling for the required US$ bills at home, and if I don't have them I've even gone and specifically bought it here. At the least to save having to queue for the bank on arrival (+lousy rate), and then start to have to queue again for immigration. It is honestly one of the reasons I don't consider say going to Batam as much fun any more... the prospect of all the hassle and endless queueing really puts me off, and that's even before we've left the jetty and got into town

You have to personally sign a physical bank ledger and show ID to get a S$10k note from a bank here, and using them is not much easier. This I why I suspect that any issue arising from their existence, isn't an issue for SG. And let's face it, it it was, they'd be withdrawn 'yesterday'.