The Story of the Coordinating Minister for the Economy in the Soeharto Era: Pressing the Rupiah During Its Plunge to Rp 15,000 per US Dollar

JAKARTA - The weakening of the rupiah was a major blow during the 1997-1998 economic crisis. The exchange rate, which was initially stable at around Rp 2,300 to Rp 2,400 per US dollar, fell to about Rp 15,000 in June 1998.

Coordinating Minister for the Economy, Finance, and Industry during the Soeharto era, Ginandjar Kartasasmita, was involved in efforts to save the economy at that time.

In his book “Ginandjar Kartasasmita: Service from One Era to Another”, he describes the situation as a moment of lost market confidence.

The rupiah’s value, which had previously been stable, began to be abandoned by market players. The impact spread to all economic sectors.

International trade was disrupted. National banks lost credibility in the eyes of the world.

“Indonesian banks could not open L/C (letters of credit) for imports because we were no longer trusted by foreign banks,” Ginandjar stated, quoted on Thursday (9/8/2025).

Production stopped. Unemployment rose. The social crisis also widened.

The economic team tried to halt the rupiah’s fall. The initial target was directed towards a more realistic level.

“At that time, we wanted to press the rupiah back down to below Rp 10,000 per US dollar; that would already be very good,” said Ginandjar.

Stabilising the exchange rate became the key to recovery. Market confidence needed to be restored to stop capital flight and restart industry.

The rupiah crisis was seen as a crisis of confidence. Handling was directed towards measured and targeted policies.

The President at that time, B.J. Habibie, tasked the recovery of the economy. Ginandjar focused on handling urgent issues.

“I promised the President to do my utmost. Setting aside various controversies surrounding President Habibie and the appointment of several ministers, I immediately focused on handling the urgent economic problems,” he said.

International support was deemed important. Creditor countries expressed readiness to help through cooperation with the International Monetary Fund.

“I immediately began handling the urgent economic problems. It was clear to me that when the economic situation became more critical with the rupiah exchange rate trading above Rp 10,000 against the US dollar from Rp 2,400 before the crisis, we needed to restore market confidence; and for that, international support was crucial,” he said.