In late 1965, the 'new rupiah' was brought in, at 1 new rupiah to 1,000 old rupiah.
Despite the fall of the currency of about 70% from June 1997 to December 1998, inflation of 60—70% in 1998 which caused riots and the end of the Suharto regime after 30 years in power meant that the real exchange rate fell only slightly.
However, the preferable material is fibre, which is naturally plentiful in Indonesia especially in and is believed to increase the durability of the banknotes.
Banking reform continued throughout 1999, with the merger of four state banks in July 1999 into , the closure of 38 banks, recapitalisation of nine, and takeover of seven more in March 1999.
Thus, in the period from 1978 to 1986, the real exchange rate of the Indonesian rupiah fell by more than 50%, providing significant boosts to the competitiveness of Indonesia's exports.
This effectively created a freely floating rupiah.
The President and his family were opposed to the reforms, with Bambang Trihatmodjo beginning legal action against the government to keep his bank, particularly as directors of the insolvent banks were, if culpable, to be added to a Disgraced person's List, ineligible to work in the banking sector.
Despite the high inflation of the period, the exchange rate, which had essentially been preserved using the country's oil exports, was maintained at 415 rupiah until 15 November 1978.