Indonesia 1997

About Indonesia 1997

Indonesia was the worst affected country in the Asian Financial Crisis. The rupiah lost 80 percent of its value between July 1997 and January 1998. President Suharto, who had ruled for 32 years, resigned in May 1998. The banking system collapsed. Non performing loans reached 60 percent. Approximately 1,000 companies went bankrupt. GDP fell by 13 percent in 1998. The IMF provided a 43 billion rescue package, but conditions including austerity and bank closures worsened the crisis. The Indonesian bank restructuring agency spent approximately 110 billion recapitalizing banks. The case was the most devastating economic collapse of the Asian Financial Crisis and led to a complete political transformation. Indonesia recovered slowly but built stronger institutions and financial supervision.