The name for the Indonesia Rupiah was adopted from the Indian form of currency, the Rupee. Prior to the Rupiah, Indonesia used the Dutch guilder from 1610 to 1817, when the Dutch East Indies guilder was introduced. The Rupiah was first introduced during the World War II Japanese occupation. Following the end of the war, the Java Bank briefly issued its own Java Rupiah as a replacement.
Preceding their independence, the Indonesian Rupiah was introduced on November 2, 1949 as the new national currency. The Riau islands and the Indonesian half of New Guinea (Irian Barat) had their own variants of the Rupiah, but these were incorporated into the national Rupiah in 1964 and 1971. Devalued by inflation, in 1965 the New Rupiah was introduced at a rate of 1000 old Rupiah to one new Rupiah.
More recently, the Asian economic crisis of 1997-1998 depreciated the Rupiah's value by 35% in a matter of one night and was a major factor in the overthrow of President Suharto's government. The Rupiah had traded at about 2000-3000 Rupiah per 1 US dollar, but reached a low of 16,800 Rupiah per dollar in June 1998.
The Rupiah is a freely convertible currency, but remains plagued by high inflation. As of early June 2005, 1 US dollar is worth approximately 9,560 Rupiah.
| Moody's Rating |
| B |
| S&P Rating |
| BB |
|
Sovereign credit ratings play an important part in determining a country's access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets. |
What does it look like?
Political Structure
The Presidency is the highest executive office, with direct legislative powers and authority to appoint the Cabinet. The legislature of Indonesia is referred to as the Peoples' Consultative Assembly, which consists of the 550-member House of Peoples' Representatives plus 128 regional representatives. Starting in 2004, all political representatives, including the President, are to be directly elected.
In Indonesia, the political power has historically been concentrated in the hands of the Presidency, but recent constitutional amendments have been lending a greater role for the legislature.
The central bank in Indonesia is called Bank Indonesia.
Prominent Figures
The head of state in Indonesia is the President, Susilo Bambang Yudhoyono. The governor of Indonesia's central bank, Bank Indonesia, is Burhanuddin Abdullah.
Unique Characteristics
In June 2005, Indonesia's central bank set forth plans to tighten restrictions on currency trading. The reason behind the restriction was to minimize speculation by denying offshore parties Rupiah with which they can buy dollars. The tightening of currency rules also cuts the amount of capital that banks can use for foreign exchange trading (from 30 to 20 percent). With the Rupiah reaching a three year low in 2005, the currency decline threatens to slow economic growth in Indonesia by making imported good more expensive and leaving households with less to spend.
Key Economic Factors
Foreign Trade: The difference between exports and imports of foreign trade in goods and services is represented by the balance of trade. Indonesia's primary export is oil; however, as a result of mismanaged oil infrastructure, exports have declined while imports have risen. Also, due to post-tsunami (Dec. 2004) renovation efforts, imports continue to increase.
Gross Domestic Product: GDP measures the total production and consumption of goods and services in Indonesia. It is compiled by both production and expenditure approaches encompassing the entire economy. Since the 1997-98 Asian financial crisis, the economy has been strengthening under rule of President Yudhoyano. However, even so, more economic reform is still necessary.
Have additions or corrections to this material? 
