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.
Indonesia was Dutch colony until 1942, when it gained it was invaded by Japan during World War II. After the war, Indonesia gained independence in 1945. The Rupiah was introduced a year later, in 1946.
- 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 officially recognized its independence.
- The IDR saw a steady decline in value versus the dollar due to periods of high inflation.
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 Rupia is administered by the Bank of Indonesia. Banknotes appear in denominations of 1,000; 2,000; 5,000; 10,000; 50,000; and 100,000 IDR. Coins are minted in denominations of 50; 100; 200; 500; and 1,000 IDR.
History of the Rupiah
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, however the Netherlands still controlled the Bank of Indonesia until 1953.
In 1959 the official rate was fixed at 45 IDR per 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.
Due to the Asian financial crisis, Indonesia abandoned the managed float and the currency became free-floating. In the ensuing years, the Indonesian rupiah continued to give back ground, and as of July 2022, the exchange is about 15,000 IDR per USD.
IDR Currency Conversions
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.
What Is Indonesia's GDP?
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 with a GDP in 2021 of $1.2 trillion.
Does Indonesia Experience High Inflation?
Indonesia has historically struggled with periods of high inflation. In recent years, this has moderated. Its 2021 inflation rate was just 1.6%, but jumped to a 7-year high in the summer of 2022.
Is Indonesia a Democracy?
Since political reforms took hold in 1999, Indonesia has transitioned to a democratic republic with a wide range of individual freedoms.