Indonesian exports, based on its rich natural resources and agricultural productivity, were necessary for the country as it earned Indonesia foreign exchange. With the foreign exchange earned Indonesia could purchase raw materials and machinery needed for the development of production and industry. In the 1980s 25 % of domestic product or GDP of Indonesia was exported. The most significant export was petroleum and the other things exported were agricultural products like rubber, coffee etc.
Export earnings helped Indonesia to borrow from international financial markets and development agencies and these borrowings formed the financial basis of government sponsored development projects in Indonesia. But the borrowings were brought under a limit as the payment obligations were increasing. By 1990 Indonesia's total foreign debt was US $ 54 billion. The Foreign Debt Coordinating Committee was established in 1991 to check the growing foreign debt. The major financial aids of Indonesia are Netherlands, Denmark, Canada, Japan, World bank and the Asian development Bank(ADB).
The unit of currency of Indonesia is the Indonesian Rupiah. the foreign exchange rate of Indonesian Rupiah against some of the major currencies of the world are as follows:
Currency
Conversion from Indonesian Rupiah
Conversion to Indonesian Rupiah
British pound
18.1275
18.1275
danish krone
1.63
0.6099
Euro
12.20
0.08
Indian rupee
0.22
4.50
Japanese yen
0.07
13.66
Korean won
0.0098
102.25
Mexican peso
12.20
1.19
Swiss franc
12.20
0.13
Canadian dollar
8.49
0.11
Thus Indonesia foreign exchange rates determine the demand and supply relationship of in the international as well as domestic market. Sterilization is done from time to time by Bank Indonesia for maintaining a stable exchange rate.
