The Long Struggle of Indonesian Rupiah; History – Development

Indonesian Rupiah is the only Indonesian money that officially admits to the Indonesian government. In its history, Rupiah has a long struggle story so that it finally becomes legally as Indonesian money. That was a long history start when the first history of the Dutch in Bali.

Before Indonesia declares its independence, there are so many types of money in Indonesia. Here we have a story about Indonesian Rupiah from its history and the development. Let’s check them out!

1. History Before Independence

Indonesian take the Rupiah as it comes from the Indian Sanskrit, the Rupiya, and Rupyakam which means silver. That because at that time, Hinduism and Buddism from India become the most affection from the Indian kingdom.

The assimilation of Hinduism and Buddhism kingdom in Indonesia was existed since about the century of 6 BC. Until the Dutches came to invaded then the money was used by Indonesian is sen and gulden as the effect of Dutch colonialism in Indonesia. They are from the Hindian-Netherland government which issued by De Javasche bank.

In 1942, when Japan came to invade Indonesia, the money issued by the Dutches was drawn by Japan. They change the money issued by Nanpo Kaihatsu Ginko bank. In the first 1945, Japan makes it in the Indonesian language to take Indonesian sympathy which calls as Rupiah Hindian-Netherland.

2. During Independence

Once Indonesia declared its independence on August 17, 1945, and released the flag of Indonesia, the money was still used by Indonesian still kind of vary. All of the money issued by the Dutches and Japan governments were valid to use.

At that time, the economical development was so unstable. Moreover once the NICA (Netherland Indies Civil Administration), they have drawn all the Indonesian money and change them into the Gulden NICA.

Indonesian military power with Soekarno as the first president avoids the Gulden NICA to becomes Indonesian money. Then on October 3, 1946, the Indonesian government officially declared their new Indonesian money which calls as Oeang Republik Indonesia (ORI).

At that time, the spreading of ORI was difficult to reach in all of the Indonesian regions. That is why there became an ORI region issued by every region in Indonesia which call as Oeang Republik Indonesia Daerah (ORIDA).

The ORI and ORIDA were not valid in long periods where they only exist for about 5 years. In 1950, Indonesian tried to gather all of the money and change them into Uang Republik Indonesia Serikat.

3. After Independence

In 1950, even though the Indonesian government declared about the use of Uang Republik Indonesia Serikat, the process was still difficult to do. The amount of money was too much and Indonesia having trouble with money deviation. That is why it is become the part of history of the capital market in Indonesia.

Indonesian government decided with the Gunting Sjafrudin policy. The purpose of using these policies is to draw all of the money from the De Javasche Bank and NICA. The Indonesian government took the loan at about 1,5 billion Rupiah with 3% of the interest from the issuance of Bonds of the Republic Indonesia.

In December 1951, De Javasche Bank was nationalized to become Bank Indonesia (BI) as the central bank. It was issued by Law no. 11 of 1953 which came into force on July 1st, 1953. That is why, Bank Indonesia (BI) claims their firstborn at Juli 1st, 1953.

After the declaration, there was two money that legally uses in Indonesia which was issued by BI and Finance Ministry as the Indonesian government. BI will issue the banknotes in the denomination of Rp. 5 and above. The government will issue banknotes and coins under Rp. 5.

In 1968, BI has the single right which they legally become the only bank to issue the Indonesian Rupiah. The government will never issue the money again since then. For the efficiency reason, the money only issued by BI.

5. The Development

The development of Indonesian Rupiah since 1968 becomes evolve from time to time. In 2011, the Indonesian government decided the new law which mentions in UU No. 7 Th. 2011 about Indonesian money. The law contains new regulations such as the Indonesian money should be assigned by the Finance minister and BI governor.

In, 2014, there was a money emission that the Indonesian government plan to do a money redenomination. As mentions in the new law in 2011 above, BI did not only have the only right to issued the money. But, they have to make a good coherence between BI and the Finance Ministry to issue the money.

Besides, the new regulation, there is also a new safety for Indonesian money to avoid the money counterfeiting. In 2014, there were so many cases in Indonesia about money counterfeiting so that this regulation came out.

In 2016, again, there was a money emission which makes the Indonesian government issued a new form of money. They still didn’t do the redenomination, but change the picture, design, and new safety matter. They issued about seven banknotes and four coins.

The Indonesian Rupiah which was issued in 2016 consists of some nominal values. They are IDR 100,000, IDR 50,000, IDR 20,000, IDR 10,000, IDR 5,000, IDR 2,000, and IDR 1,000. Meanwhile, the metal rupiah consists of the denominations of Rp1,000, Rp500, Rp200, and Rp100.

All of this money is the money that legally uses in Indonesia until now. The use of hero images in the money has been approved by the 7th Indonesian President Joko Widodo (Jokowi), the 26th Minister of Finance Sri Mulyani Indrawati, and the 15th Governor of Bank Indonesia Agus Martowardojo.

So, there are the history and development of Indonesian Rupiah that you should know. It has a long history and struggles to finally become the Indonesian Rupiah.