Indonesian Rupiah

Increasing zeros in money should denote higher value, but for that country’s citizens only. However, when the foreign exchange rates dive to an unbelievable low, the higher amount of zeros on the bill, the poorer the country gets.

The Japanese invasion made it possible for Indonesia to establish an initial monetary system. Still, the Dutch invasion and its conflict with Japan suppressed the plan to advance this scheme. Only when the government firmly decided to pursue the printing of the new money, despite predicted setbacks, was the country able to launch the first Indonesian rupiah in 1946.

Being famous for having the Spice Island as an archipelago, the Dutch refused to remove their hold on the country. After the struggle for independence, Indonesia finally achieved a fixed exchange rate of 415 IDR per 1 USD. A rupiah is equal to 100 sen, its sub-unit, but the currency’s continued devaluation eventually made obsolete the sen coins and banknotes.

The circulating rupiah denominations are 1000, 2000, 5000, 10000, 20000, 50000, and 100000 in banknotes. One rupiah is still an official bill but is practically worthless. Subsequently, all notes below 1000 IDR lost their purchasing ability because of further inflation.

The Indonesian rupiah converted freely, but is considered risky to keep. Even being at float, the current exchange rate falls to around 9000 IDR per USD. So in 2010, the government proposed to cut back the zeros for simple daily transactions. The resulting attempt was the use of ribu or Rb as replacement for the last three zeros of a thousand rupiah, and juta or Jt replacing zeros in a million. The US dollar eases the economy, so far, as the second currency, while the official sets out to reform its condition.

The rupiah bills should then be kept in good condition. The exchange offices are very particular with the quality. It’s important to take note that older and crumpled bills have lower exchange rate compared to new and maintained ones. The banks are even stricter when it comes to US dollar exchange stating 1996 issues as non-convertible. This is generally the effect of widespread counterfeiting.