RP 50,000 note carrying Soeharto's image still valid

JAKARTA (JP): Bank Indonesia said yesterday the 50,000 note carrying former president Soeharto's image was still legal tender despite rumors it would no longer be honored.

"We hope the public will not believe baseless rumors which say that transactions will be rejected when using the Rp 50,000 note, because it is still valid," the central bank's legal affairs head Bambang Setijoprodjo said in a media statement yesterday.

He added that there was no grounds to reject the note.

Every process of printing new money or the withdrawal of old from circulation would always be announced in an official statement and distributed to the public through banks, government institutions, brochures, posters and the mass media.

Soeharto handed over power to his closest aide B.J. Habibie last month following widespread political unrest and massive student demonstrations.

The central bank also denied press reports that the central bank intervened in limiting the interest rate increase for time deposits.

The bank said the recent new interest rate policy, which would be based on the average Jakarta Interbank Offered Rates (Jibor) in the preceding week at a certain margin, was part of the government's program to guarantee bank deposits and public savings.

"This means that the banks are free to set the interest rates, but the guarantee only applies if the rates do not exceed the maximum level," Bambang said.

The new policy stipulates that rupiah savings and deposit would only be guaranteed if the interest rates are limited to 500 basis points above the average Jibor in the previous week.

The foreign exchange savings and deposits would be guaranteed if the interest rates are set maximally 100 percent above the Jibor foreign exchange rates in the preceding week.

Previously, the saving deposit rates were set at 125 percent of the Bank Indonesia SBI short-term promissory note rates. (rei)