Looking Back at Rupiah History, 1997–1998

THE EXCHANGE RATE of the rupiah against the United States dollar (US$) has come under increasing pressure. The Indonesian rupiah weakened to Rp 17,719 per US dollar, the lowest in modern Indonesian history (Kompas, 20/05/2026).

Naturally, the public is anxious, even if they do not shop in dollars. The depreciation of the rupiah against the US dollar has affected the prices of certain goods, especially imported goods and goods whose production is linked to the dollar.

Meanwhile, the government through Finance Minister Purbaya Yudhi Sadewa claims Indonesia’s economic condition remains sound, so the public need not fear. “Don’t be afraid, our economic fundamentals are strong, our fiscal position is strong. If I smile, the economy is good, the rupiah is good too. That’s why I keep smiling,” said Purbaya (Kompas.com, 19/05/2026).

Usually, the government is represented by the Finance Minister. At the forum, the President reassured the government’s seriousness. Not only to stabilise the rupiah’s exchange rate against the US dollar, but also the economic strategy and fiscal policy to ensure Indonesia’s economy grows at around 5.8 to 6.5 per cent in 2027 (Kompas.com, 20/05/2026).

With his characteristic fiery style, Prabowo also reiterated his resolve to implement Article 33 of the 1945 Constitution. Among other things, to enact new regulations on the export of natural resources through a state-owned enterprise (BUMN) formed for that purpose.

I would like to invite readers to look into the turbulence of the rupiah in 1997-1998. At that time the rupiah against the US dollar also deteriorated. At that time Indonesia had just held the 1997 elections and was preparing to convene the General Session (SU) of the People’s Consultative Assembly (MPR) in March 1998.

Before the currency crisis struck in 1997, the rupiah exchange rate against the US dollar was recorded as stable and strong, in the range Rp 2,380 to Rp 2,450. The rupiah began to creep up on 21 July 1997 to Rp 2,700 per dollar. It improved to Rp 2,633 per dollar on 1 August 1997.

In early 1998 it plunged further. On 2 January it dropped to Rp 5,363 per dollar. Four days later, on 6 January 1998, it breached Rp 10,000 per dollar. The rupiah continued to slide to Rp 17,000 per dollar on 22 January 1998.

From my notes, from July to September 1997, the mass media generally focused more on coverage of post-election elite events in 1997 and the preparations for the MPR SU in 1998. Perhaps because the exchange rate was still considered manageable and its impact not yet felt. Or perhaps because political gossip ahead of the MPR SU 1998 was more captivating by the standards of journalism at the time.