What Is the Indonesian Rupiah (IDR)?
The Indonesian rupiah (IDR) is the official currency of Indonesia, a Southeast Asian country made up of thousands of small islands. IDR is the unique currency code of the Indonesian rupiah under ISO code 4217.
- The Indonesian rupiah uses currency code IDR and is the official currency of the nation of Indonesia.
- The IDR first became available in 1946 while other currencies were also in circulation and, in 1950, became the official currency of Indonesia when the Dutch recognized its independence.
- The IDR saw a steady decline under its fixed, managed, and free-floating exchange rate structures from 3.8/USD to below 16,800 during the Asian financial crisis.
Understanding the Indonesian Rupiah (IDR)
The IDR is made up of 100 sen, and is often presented with the symbol or abbreviation Rp. The rupiah is controlled by the Bank of Indonesia. The rupiah is also informally called the perak by locals, which is Indonesian for silver.
The Indonesian rupiah was first seen in October 1946, but was only one of a number of currencies in circulation. Others included the Netherlands Indies gulden, a Japanese version of the gulden, and others. Between 1950 and 1951 the other currencies dropped off and the IDR became the official currency of Indonesia following independence from the Dutch.
Between 1949 and 1952 the exchange rate for the IDR was 3.8 per U.S. dollar (USD). The country introduced different rates for imports (11.4) and exports (7.6) in 1950, although this was later rescinded and the 3.8 rate was reintroduced.
In 1952 the currency was devalued to 11.4 IDR per USD. The government continued to try different tariff approaches to stabilize the currency and bring in revenue, but they failed. While the official rate was still 11.4, on the black market the currency had fallen to 31/USD in 1956 and 90 IDR/USD by 1958.
In 1959 the official rate was changed to 45/USD. Following this, inflation went rampant into the 60s, with effective rates for the IDR hitting close to 5,000/USD by 1965, although the official rate remained the same.
In 1965, new rupiah notes were introduced, replacing the old at 1,000 old IDR for one new IDR. The exchange rate was set at 0.25 rupiah per USD. Stabilization efforts began again under the leadership of Suharto, and by 1970 inflation had fallen and exports had grown. A more realistic exchange was set at 378/USD, but then altered in 1971 to 415/USD. That rate stayed in effect till 1978 when it was devalued again to 625/USD.
In 1978 the country moved to a managed float instead of a fixed exchange rate system. The currency continued to decline, trading near 1,664/USD in 1983 and 2,350 in 1997.
Due to the Asian financial crisis, Indonesia abandoned the managed float and the currency became free-floating. Through the crisis, the currency fell below 16,800 IDR/USD. As the restructuring began, the currency had recovered to near 8,000 IDR/USD by 1999.
In the ensuing years, the Indonesian rupiah continued to give background, and as of June 2019, the exchange is 14,234 IDR/USD.
IDR Currency Fluctuations
When looking up a currency quote, the rate will typically be given as USD/IDR. The corresponding rate, such as 14,234, means it costs 14,234 IDR to buy one USD.
Assume a traveler is monitoring exchange rates for an upcoming trip. In June 2018, they would have seen the rate was around 14,000, but by October 2018 the rate had increased to 15,400. That means the IDR had fallen in value, since it costs more IDR to buy one USD. Alternatively, this could be viewed as the USD increasing in value relative to the IDR.
By early 2019 the rate had fallen back to near 14,000. This means the USD had declined in value relative to the IDR (or IDR increased relative to USD) since it costs fewer IDR to buy one USD than it did a few months ago.
To find out how much one IDR is worth in USD, divide one by the exchange rate. For example, if the rate is 14,200, divide one by 14,200 to get 0.00007. This is the IDR/USD exchange rate, meaning it costs $0.00007 for each Indonesian rupiah.