Currency Reform

Currency reform is a reform work the financial condition of a country through the renewal value of money policy (usually in the form of value devaluation), which is followed by with withdrawal of valid circulating money and change it into a new money. Based on monetary Indonesian history, it's noted that the goverment had done currency reform policy for four times, that are 1946, 1950, 1959, and 1965.

The very bad economy condition become the background of the 1965 currency reform. The rate of inflation reached up to 650 %, income per capita was only 80 dollars America, and the prices were very expensive because of the rare of basic requirements and daily needs. Beside that, the goverment need of funds to do it's politics was also high.

The 1965 currency reform was done based on the 1965 President Decision number 27. At the time, the goverment started to circulate new money with the value 1 : 1000, which was each 1000 rupiahs of old money subtituted with 1 rupiah of new money. The exchange was burdened formally revolution contribution 10 %. Therefore, each of 10.000 rupiahs money would be subtituted with 9 rupiahs of new money.