Friday, April 26, 2013

History of Indonesian Currency

2 November 1949 is the date of the enactment of the rupiah as the official currency of the Indonesian rupiah and printed as well as its use is set by Bank Indonesia. Although at that time the Riau Islands and West Irian rupiah has their own variation, but their use was disbanded in 1964 in 1974 in Riau and West Irian.
Indonesian money. Government deems it necessary issuing its own currency in addition to functioning as legal tender is also used as the main symbol of which is an independent state. Word "dollars" is derived from the words "rupees", the currency of India. Indonesia has been using the currency of the Dutch Gulden 1610 to 1817. After 1817, the currency was introduced Gulden Netherlands Indies.

Rupiah currency was first introduced officially at the time of Japanese occupation during World War 2, with the name of the Dutch East Indies dollars. After the end of the war, the Bank of Java (Javaans Bank, later to become Bank Indonesia) introduced the Java rupiah currency as a substitute. NICA gulden currency created by the Allies and a collection of printed currency guerrilla also apply at that time. Rupiah is the currency that may be exchanged for free, but traded with the penalty due to the high levels of inflation. New Currency in the history of money and function of money as well as the types of manufacturing was experiencing a lot of stories and a long history in the country of Indonesia

Economic situation in Indonesia at the beginning of independence was marked by hyperinflation caused by the circulation of a currency that is not controlled, while the Government of the Republic of Indonesia does not have a currency. There are three currencies were declared valid by the government of the Republic of Indonesia on October 1, 1945, the Japanese currency, the currency of the Dutch East Indies, and currency De Javasche Bank.

Among the three currencies that exchange rate experienced a sharp decline is Japan's currency. Its circulation reached four billion so that the Japanese currency is the source of hyperinflation. Society who suffer most are farmers, because they are the most widely store the Japanese currency.

Economic chaos caused by the hyperinflation exacerbated by policies AFNEI Commander (Allied Forces Netherlands East Indies) Lieutenant General Sir Montagu Stopford is on March 6, 1946 announced the implementation of NICA currency in all parts of Indonesia that has been occupied by troops AFNEI. This policy was protested loudly by the government of the Republic of Indonesia, for violating the agreement that each party shall not issue a new currency for the absence of a political settlement. But the protest was ignored by AFNEI. NICA AFNEI currency used to finance military operations in Indonesia and also disrupt the national economy, so it would appear people's confidence crisis on the ability of the Indonesian government to address national economic problems. Because the protest is not addressed, then the government of the Republic of Indonesia issued a policy that banned all Indonesian people using NICA currency as a medium of exchange. This step is very important because NICA currency in circulation outside the control of the government of Indonesia, making it difficult for national economic recovery.

Therefore AFNEI not revoke the application of the NICA currency, then on October 26, 1946 the Indonesian government imposed a new currency ORI (Oeang Republic of Indonesia) as legal tender throughout the territory of the Republic of Indonesia. Since that time the Japanese currency, the currency of the Dutch East Indies and De Javasche Bank currency is no longer valid. Thus there are only two currencies in force the ORI and NICA. Each of these currencies is only recognized by the issuing. So ORI is only recognized by the government of the Republic of Indonesia and the only currency recognized by AFNEI NICA. The people turned out to give more support to the ORI. This has political implications that more people siding with the government of the Republic of Indonesia of the interim government that is supported AFNEI NICA.

To set the exchange rate with a foreign currency ORI in Indonesia, the government of the Republic of Indonesia on November 1, 1946 to change the leadership of the Foundation Center Margono Djojohadikusomo Bank to Bank Negara Indonesia (BNI). A few months earlier the government has also changed the Japanese occupation government bank Shomin Ginko to Bank Rakyat Indonesia (BRI) and Tyokin Me a Post Office Savings (KTP), which changed its name in June 1949 a Post Bank savings and finally in 1950 to the State Savings Bank ( BTN). All this serves as a bank commercial bank which is run by the government of the Republic of Indonesia. Its main function is to collect and distribute funds or public money as well as service providers in the payment traffic.

Long before the arrival of the western nations, the archipelago has been the center of international trade. While in mainland Europe appears simple banking institutions, such as Bank van Leening in the Netherlands. The banking system was then taken by a western nation that expands the archipelago at the same time. VOC in Java in 1746 founded the Bank van De Leening which later became De Bank Courant en Bank van Leening in 1752. The bank is the first bank that was born in the archipelago, the precursor of the banking sector in the future. On January 24, 1828, the Dutch established the circulation by the name of De Javasche Bank (DJB). Over the decades, the bank operated and developed by an Exclusive Right of the ruler of the Netherlands, DJB Wet enacted until 1922.

During the Japanese occupation has stopped DJB and Dutch banking for a while. Then the revolution came, the Dutch East Indies experiencing duality of power, between the Republic of Indonesia (RI) and the Nederlandsche Indische Civil Administrative (NICA). Banking was divided into two, DJB and Dutch banks in the region whereas NICA "Jajasan Poesat Bank Indonesia" and Bank Negara Indonesia in the territory of the Republic of Indonesia. Round Table Conference (RTC) in 1949 ended the conflict Indonesia and the Netherlands, then DJB defined as the central bank for the Republic of Indonesia (RIS). This status continued to survive until the return of the unitary state of the Republic of Indonesia. Next as a sovereign nation, the Republic of Indonesia nationalized central bank. So since July 1, 1953 DJB transformed into Bank Indonesia, the central bank of the Republic of Indonesia. The Asian economic crisis of 1998 led to the exchange rate of the rupiah fell to 35% and the weakening rupiah economic situation in Indonesia is lowered.

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