BI says economy still safe from fake banknotes

JAKARTA (JP): Bank Indonesia deputy director for banknote supervision Kaidi Thohir said on Wednesday that the amount of fake rupiah banknotes in circulation did not pose a threat to the economy.

Kaidi said that the amount of the fake rupiah handed over by the police and the banking community from January to April amounted to Rp 6.43 billion, representing only about 0.0061 percent of the total banknotes in circulation.

"The 0.0061 percent is too small. This (level) is no threat to the economy," he told a news conference.

"But the scale of the news reports is creating a greater problem," he said, pointing out one report which said some people had started to reject Rp 50,000 banknotes.

He also said that some 88.67 percent of the confiscated fake banknotes had not been circulated to the public.

Retired Army senior officer Soemarjono was officially named the main suspect in a counterfeit money case on Tuesday after he failed to refute allegations when Surabaya Police confronted him with other suspects.

The Surabaya Police have confiscated large sheets bearing an equally large number of uncut fake Rp 50,000 notes, totaling Rp 4.7 billion. The notes were of the old type, bearing the picture of former president Soeharto, while new banknotes depict the National Anthem composer W.R. Supratman.

The central bank said earlier this year that the confiscated fake rupiah bills in circulation last year amounted to Rp 6.17 billion, equivalent to about 0.01 percent of the total Rp 50.4 trillion of banknotes in circulation.

For 1998, the total fake bills in circulation reached 0.013 percent of the money in circulation, while for 1997 it was 0.016 percent.

Kaidi denied allegations that the central bank was somehow connected to the cases of counterfeit money.

There have been rumors that the counterfeiters had been able to print fake money by using the same banknote paper as that used by Bank Indonesia.

Kaidi said this was impossible because Bank Indonesia ordered the paper at an amount exactly relating to the number of banknotes to be printed.

He also said that the suppliers, mostly from overseas, would not supply the counterfeiters with the banknotes paper because their business was based on trust.

"The suppliers also supply banknote paper to other countries. So their image will be badly tarnished if they're proven to have supplied the counterfeiters," he said.

He said that the central bank had 10 suppliers of banknote paper, and that nine of them were foreign suppliers, namely Portals from the U.K., Germany's Louisenthal, France's Arjo Wiggins, the Netherlands' VHP, Italy's Cartiere M. Fabriano, Crane & Co. of the U.S., Spain's Fabrica de Moneda, Sweden's Tumba Brak, and South Korea's Hyosung/Komsep.

The local supplier is PT Pura Barutama.

Kaidi admitted that the quality of the fake money was improving.

But he said that two things could not be copied: the watermark and the metal strip.

He added that the surface of the fake money was smoother than the authentic banknotes because of the use of different types of printing machines.(rei)