A couple of weeks ago I received an email from Peter Lavelle at Pure FX. asking if he could write a guest post on my site. My heart did what it normally does on these occasions – it sank. Over the past few months I’ve received a number of requests from companies asking if they can advertise, put banners up, write guest posts (the 2 most incongruous being on cars and casinos?) and even that I write a review for a new children’s product. Clearly none of these companies have bothered to spend time looking to see what my blog is all about or read any of my posts. Shame on them!
That being said, I have to admit that in moments of weakness some of those requests have been considered (I’m not going to lie, it would be very nice to make some money) but then I’ve soon rejected them because they have nothing what so ever to do with Indonesia, nor what I write about on my blog and, most importantly, I don’t want to compromise my loyal readers and followers by writing/posting content which is alien to what they’ve signed up for.
So, how exactly did Peter manage to twist my arm and be my first guest post? The truth is that he made me laugh in his emails and he understood perfectly what I meant when I said ‘Only on the condition that it’s light hearted – nothing heavy, this is meant to be a fun site’ I also thought it might make interesting reading, especially for anyone either planning a trip here or for expats planning on moving here. I am not an expert on money but Peter most certainly is so it’s well worth checking out the link if you are moving abroad and need some advice.
Just before we get to what Peter has to say on the Indonesian Rupiah (IDR) I thought it might also be useful if I took today’s currency conversion so you can make some sense of the figures. It’s a nightmare currency to get your head around when you first arrive and it took me weeks to figure out all of the zeros – In the early days I used to get cold sweats each time I went to the cash machine, typing in all those zeros is nerve wracking if you’re used to a million being something that you can only dream of. A word of caution – check the 10,000 notes and the 100,000 notes carefully. They are similar colours and can easily be confused – especially after imbibing Bintang*
There are currently 7 notes, the largest being the 100,000 rupiah which is equivalent to US $10.3100 or £6.85
50,000 rps = US $5.15500 or £3.42
20,000 rps = US $2.06200 or £1.37
10,000 rps =US $1.03 or £0.68546
After that there are 5,000, 2,000 and 1,000 notes which when I try to work out the equivalent in $ and £’s starts to give me a headache and that’s before we even get onto the coins!
1,000,000 one million Indonesian rupiah is equivalent to US $103.100 or £68.54
*Bintang – Indonesian beer .
TAKE IT AWAY PETER!
10 fun facts about the Indonesian rupiah!
The rupiah! You might not know much about it except its name, but it’s one of the most colourful currencies around, both literally and figuratively. Here are 10 fun facts about Indonesia’s currency.
1. Informally, Indonesians use the word “perak” (‘silver’ in Indonesian) to refer to the rupiah.
2. All Indonesian coins feature the Garuda Pancasila, a mythical eagle of Hindu and Buddhist mythology that acts as Vishnu’s vehicle.
3. Inflation has trashed the value of the rupiah. In 1949, the exchange rate was 3.8 rupiah to $1 US. Today, it’s 9,700 rupiah to the US dollar. That’s an increase of 2552%!
4. The Indonesian government has repeatedly devalued the rupiah, simply by knocking zeros off the end. It did this once in 1959, when 1,000 rupiah became 100, then again in 1966, when 1,000 rupiah became 1.
5. If not for these devaluations, then today US $1 wouldn’t equal 9,700 rupiah, but 9,700,000,000.
6. As of October 2010, Indonesia’s central bank had rupiah assets of 4,029 quadrillion or 4,029,000,000,000,000.
7. The 100,000 rupiah note is the second highest denominated note in Asia, after Vietnam’s 500,000 dong note ($25).
8. At times of extreme rupiah volatility, it’s common for shops to redenominate the prices of items into US dollars.
9. Rupiah notes beneath 100 are so worthless, it’s common for totals to be rounded up or receive sweets in lieu of change in Indonesian shops.
10. The Indonesian government has another devaluation planned for 2014, when 1000 rupiah will again become 1.
About the writer
Peter Lavelle is the chief economist at foreign exchange broker Pure FX. He’s worked in foreign exchange since 2010, and is a close follower of global politics and economics.