Indonesian Rupiah - IDR

Overview

The Rupiah is the official currency of Indonesia, which is an archipelago of over 17,500 islands in Southeast Asia and Oceania. The country shares land borders on three of these islands with Papua New Guinea, East Timor, and Malaysia. Neighboring countries include Singapore, Philippines, Australia, and the Indian territory of Andaman and Nicobar islands. Indonesia is a founding member of ASEAN and a member of the G-20.

Economy

• Indonesia has a mixed economy in which both the private and government play an important role. The country is the largest economy in Southeast Asia.
• The nominal gross domestic product in Indonesia in 2010 was U.S. $ 706.73 billion, with an estimated nominal GDP per capita of $ 3,015.
• In June 2011, at the World Economic Forum on East Asia, the President of Indonesia predicted Indonesia will be one of the world’s top ten strongest economies in the next decade.
• The industrial sector is the largest economy and accounts for 46.4% of GDP (2010), followed by services (37.1%) and agriculture (16.5%). Since 2010, the service sector has hired more people than other sectors, and now accounts for 48.9% of the total workforce, followed by agriculture (38.3%) and industry (12.8%). Traditionally, agriculture was the largest employer for centuries.

History

• As a Dutch colony, Indonesia used the Netherlands Indies Guilden until the Japanese invasion in 1942. The Japanese printed their own version of the Guilden in excess quantities, causing hyperinflation during their occupation.
• The Japanese Guilden continued in use after the war, although its supply dwindled due to the destruction of printing plates.
• The Allies’ Netherlands Indies Civil Administration' (NICA) introduced their own guilden in 1943, but Indonesian nationalists opposed this issue.
• Ignoring advice from the Allied forces, Dutch nationalists on the island of Java introduced the Indonesian Rupiah on October 3, 1946. Japanese and low-denomination pre-war guilden could be exchanged for the new currency, but not the 1943-issued NICA guilden. The Japanese guilden continued to be the dominant currency, especially in remote territories, and the NICA guilden continued in use in Dutch-controlled areas.
• In 1950-1951, various reforms were made to reduce the amount of and bewildering array of money in circulation—all of which was converted forcibly at a devalued rate to the De Javasche Bank Rupiah (DJB).
• In 1953, the De Javasche Bank, still controlled by the Dutch, was nationalized and become Bank Indonesia. The first Bank Indonesia money appeared the same year, replacing the DJB.
• Inflation ravaged the country over the next decade, requiring large devaluations of the rupiah in 1959 and 1965. Under the Suharto government, inflation was brought under control by the mid-1970s.
• Inflation reappeared in the early 1990s. The Asian financial crisis of 1997–1998 reduced the rupiah's value by over 80% in a few short months. This devaluation was a major factor in the overthrow of President Suharto's government after a 30-year lock on power.

General Information