Need Small Bills During Ramadan? Look to the Streets
Jakarta Globe & Antara
Long lines of people waving their hands along the main streets in Jakarta and other cities is a common sight during Ramadan, despite an appeal by Indonesian Council of Ulema to stop the practice.
These people are working as informal money changers, charging small fees as they cater to the growing demand during the fasting month for small denominations and crisp new bank notes.
Rehan, 40, has worked as a money changer during Ramadan for the past five years to boost his usual income as an ojek motorcycle taxi driver in Banjarmasin, South Kalimantan.
“I do this so my family can get a little [financial] help,” he told state news agency Antara on Monday. “There are so many ojek [drivers] these days. It’s getting harder to get customers.
As a money changer, he said he turns over about Rp 10 million ($1,100) each day during the fasting month.
“Fees for the [money-changing] service are just average, about 5 percent or less of the amount of money changed,” he said.
The demand for small denominations and crisp bills usually increases before the Idul Fitri holiday at the end of Ramadan, when friends and family traditionally give children a token amount of money.
But the business of money changing has been banned by the Indonesian Council of Ulema, or MUI, because Islam strictly forbids interest and mandates that money is be exchanged in equal amounts.
Indonesia has the largest Muslim population in the world, with almost 85 percent of its 240 million people practicing Islam.
The central bank, Bank Indonesia, said that it was supplying Rp 89.4 trillion in real cash, including small denominations, to meet rising demand during Ramadan and Idul Fitri.
The amount was 16 percent higher than last year, Bank Indonesia governor Darmin Nasution said on Friday.
“[On Saturday] Ramadan begins, and usually the need for cash rises,” he said. “Our estimate is that we’ll need to prepare Rp 89.4 trillion in cash.”
Darmin said most of the cash would be in denominations of Rp 20,000 or higher, while the remainder would be in Rp 10,000, Rp 5,000 and Rp 1,000 notes.
“The amount needed has been estimated based on past experience,” he said. “With more holidays this time, the need for money is also rising.”
He said the central bank would station 12 vans at the National Monument (Monas) in Central Jakarta to provide small change, more than double the number of vans during Ramadan last year.
People can exchange large notes for smaller ones without any charge.
The practice of giving small tokens of money is a common practice, similar to the practice of exchanging gifts on Christmas or giving out red envelopes, or ang pao, on Chinese New Year.
In Banjarmasin, money changers attracted long lines of people on several major streets and at markets and public centers, Antara reported on Monday.
Bank Indonesia has said the practice of informal money changing might prompt inflation to accelerate in August this year compared to the same month a year earlier, but it would not cause the central bank to change its monetary policy.
Bank Indonesia has kept its benchmark rate at 5.75 percent since its last cut in February.