5 Rupiah – Indonesia

In 1974, Indonesia was navigating a complex economic landscape under President Suharto's New Order regime. The country was experiencing the mixed effects of an oil boom, which provided significant revenue but also fueled inflation and exposed structural weaknesses. The rupiah, officially fixed to the US dollar, was under growing pressure as the economic windfall led to increased government spending, imports, and monetary expansion, creating a classic "Dutch disease" scenario where other export sectors became less competitive.

This period culminated in the Malari incident (Malapetaka Januari or January Disaster) of January 1974, which began as student protests against corruption and the overwhelming presence of foreign (particularly Japanese) investment during Prime Minister Tanaka's visit. The protests escalated into riots, revealing deep public discontent with economic inequality and the perceived negative impacts of rapid modernization. While not a direct currency crisis, Malari was a profound socio-political shock rooted in economic grievances, forcing the government to reassess its development policies.

In response, the government introduced a package of stabilization measures in 1974. This included a modest devaluation of the rupiah by 7% in November, aimed at improving the trade balance by making non-oil exports cheaper and imports more expensive. More broadly, the regime attempted to cool the overheated economy, tighten credit, and launched initiatives to strengthen pribumi (indigenous Indonesian) businesses. Thus, 1974 was a pivotal year where currency adjustment was one tool used to address the inflationary pressures and social tensions unleashed by the oil boom.