The rupiah is the official currency of Indonesia. It has a hundredth subunit called the sen, but it is now obsolete in consumer transactions, being used now only electronically, in bank statements and financial reports. The rupiah was introduced in 1949, just prior to Indonesia’s independence. Due to devaluation, the rupiah has been reissued once. The country was recently plagued by inflation again, and plans were made in 2010 to reissue the currency but were never finalized. The rupiah is issued and maintained by Bank Indonesia, the central bank of the Indonesian Republic.
In the early 19th century, the Dutch held Indonesia as a colony and the Netherlands Indies guilder was introduced as the local currency. During World War II, occupied Indonesia was forced to use Japanese currency until the Dutch reoccupied Indonesia in 1942. The occupying Dutch then issued a new currency called the NICA gulden. However, Indonesia issued an early version of the rupiah in 1945 but confidence of its value was never achieved. When Indonesia began pushing for independence in 1949, the new rupiah was introduced. After an independence agreement became internationally recognized, it took two years for the new government to clean up the currency system. The Java Bank was reorganized and then replaced by Bank Indonesia in 1953.
In the 1960s, the rupiah suffered from severe devaluation, but by the end of the decade, it had rebounded. Bank Indonesia was granted sole issuing authority rights for the rupiah and new coinage was introduced in 1970. The Asian Financial Crisis of 1997, however, led to another drastic devaluation of the rupiah. Although the economy and the value of the rupiah has begun a rebound, confidence in the currency is still low. Rupiah is circulation through coins denominated in 50, 100, 200, 500 and 1000 rupiah. Banknotes are denominated in 1,000; 2,000; 5,000; 10,000; 20,000; 50,000 and 100,000 rupiah.
Indonesia has the largest economy of any nations in Southeast Asia. It is a member of the G-20, which is comprised of the world’s most economically relevant countries. The industrial sector is the largest of the Indonesian economy, followed by services and agriculture. Indonesia’s primary trading partners are Japan, Singapore, the United States and China. Growth has been steady since 2004, but is being held back by poverty and political instability.