A tidy sum of money flows between the United States and Indonesia regularly. In 2016, around U.S. $248 million was sent from the U.S. to Indonesia, and around U.S. $22 million made its way from Indonesia to the U.S. Two-way trade between both countries in the same year amounted to around U.S. $25.2 billion.
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The U.S. dollar, in its existing form, has been the official currency of the United States since 1792. Some of the other regions that use it as legal tender include the British Virgin Islands, Turks and Caicos Islands, the Caribbean, the Federated States of Micronesia, two British Overseas Territories, Ecuador, and El Salvador. Its use alongside other currencies is also found in places such as Zimbabwe, Liberia, Costa Rica, Haiti, Panama, Belize, Myanmar, and Cambodia.
The U.S. dollar is on top on the basket of reserve currencies, which is why most central banks the world over hold considerable volumes of this currency. Its share of the global forex market turnover was more than 87% in April 2016. The U.S. dollar remains the most commonly traded currency in the world, with around U.S. $5.1 trillion passing through the forex market each day.
|Nicknames||Buck, moolah, paper, dough, dead presidents, |
bones, greenback, green
|Bank notes||$1, $2, $5, $10, $20, $50, $100|
|Coins||1c, 5c, 10c, 25c, 50c, $1|
The Indonesian rupiah was first introduced in October 1946. However, since the Dutch were trying to reestablish control over the region, the rupiah traded only on the black market in its early days. The rupiah was formally recognized as Indonesia’s legal currency by the international community only in 1950, after the Netherlands recognized the country’s sovereignty. Then, the rupiah replaced existing Dutch, Japanese, and Javanese currencies from the region.
The word rupiah is derived from the Hindi word “rupiya”, which, in turn, owes its roots to the Sanskrit word “rupyakam”.
The Riau islands adopted the rupiah as legal tender in 1964, followed by the Indonesian half of New Guinea in 1971.
|Sub unit||Sen (no longer in use)|
|Bank notes||Rp 1,000, Rp 2,000, Rp 5,000, Rp 10,000, Rp |
20,000, Rp 50,000, Rp 100,000
|Coins||Rp 100, Rp 200, Rp 500, Rp 1,000|
U.S. Dollar / Indonesian Rupiah Historical Rates
Upon its introduction in 1949, the Indonesian rupiah traded at Rp 3.8 to the U.S. dollar. Indonesia introduced the Foreign Exchange Certificate System (FECS) in March 1950, setting an export rate of Rp 7.6 and an import rate of Rp 11.4 to the U.S. dollar. After the system was scrapped in January 1952, the rate dropped to Rp 3.8 to the dollar.
The devaluation of the rupiah in 1959 led to a phase of very high levels of inflation, crossing the 600% mark by 1965. The Indonesian government then chose to devalue the currency by issuing a new rupiah that valued at 1,000 old rupiahs. Since multiple exchange rates existed at the same time, the government officially reset the rate to a seemingly meaningless Rp 0.25 to the U.S. dollar.
Indonesia experienced some stability and growth from 1966 to 1971. However, despite the country’s efforts to liberalize, multiple exchange rates still existed. A new more realistic rate was set in April 1970, with Rp 378 valued at one U.S. dollar. This was devalued to Rp 415 in August 1971. From 1971 to 1978 Indonesia relied on a fixed-rate method, so the USD/IDR exchange rate did not change during this period.
Indonesia took to the managed float system from 1978 to 1997. The value of the rupiah dropped by around 50% by 1986, although it provided a boost to the region’s export industry. By September 1986, one U.S. dollar was worth Rp 1,134. The fall of the rupiah against the dollar continued even after the 1986 devaluation, getting to Rp 2,350 by June 1997.
The financial crisis in Asia affected the rupiah’s value significantly, and it traded at Rp 2,955 to the U.S. dollar by August 1997. A string of incidents and measures that followed, some of which include seeking support from the International Monetary Fund, the liquidation of 16 banks, the end of Suharto’s rule, and a further recapitalization of banks, saw the rupiah trading at Rp 7,900 to the dollar by October 1999.
Indonesia showed some signs of stability in the early 2000s. However, the 2008 global financial crisis put pressure on the country’s economy again. Since then, the value of the rupiah has oscillated between Rp 9,000 and Rp 14,500 to the dollar.
USD/IDR in the last five years
|U.S. $1 =|
|1 July, 2013||Rp 10,277.50|
|1 July, 2014||Rp 11,577.50|
|1 July, 2015||Rp 13,527.50|
|1 July, 2016||Rp 13,098.50|
|1 July, 2017||Rp 13,325.00|
USD/IDR in the last five months
|U.S. $1 =|
|1 March, 2018||Rp 13,765.00|
|1 April, 2018||Rp 13,912.50|
|1 May, 2018||Rp 13,895.00|
|1 June, 2018||Rp 14,330.00|
|1 July, 2018||Rp 14,455.00|
What Affects USD/IDR Rates?
Monetary policies set by the U.S. Federal Reserve and the Bank of Indonesia tend to have a bearing on how the USD/IDR currency pair performs. In addition, the value of the rupiah does not necessarily reflect the country’s economic growth because it is typically driven by market perception. Other factors that affect the value of the USD/IDR currency pair include interest rate differentials between both countries as well as their trade deficits.
If you want to send money from the U.S. to Indonesia or from Indonesia to the U.S., pay close attention to how the USD/IDR currency pair is performing. If you are not in a hurry to transfer funds, you can turn to overseas money transfer companies that provide hedging tools such as market orders and forward contracts. These tools give you the ability to make the most of fluctuations in exchange rates.