The local currency in Indonesia is called rupiah. Notes commonly used is 500, 1.000, 5.000, 10.000, 20.000, 50.000 and 100.000 Rupiah. Coin values are 50, 100, 500 and 1.000 rupiah. It is not allowed to bring more than 50.000Rp out of the country. One of the small everyday problems you will encounter is to have enough of the smaller values. Most people are not able to change a 50.000 or a 100.000 rupiah note, or that is anyway what they will tell you.
The rupiah has fluctuated considerably over the last years, as much as 500 rupiah to one US dollar in one day. It used to be a relatively stable currency at around 2.000 to 2.4000Rp to one dollar until 1997 and the Asian monetary crisis. At worst it traded as low as 17.000Rp to one dollar, today (2003) it has settled around 8.000Rp to one dollar. During one month in 2002 the exchange rate varied from 9.200 to 8.250, so be prepared for further changes
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Unless you use your credit card it is unlikely that you get the rates quoted in newspapers and on websites, be aware that some ATM’s will charge a fee for each transaction if the ATM does not represent your own bank. Today you will find ATM’s in all large cities and tourist areas which will accept major cards like Visa and MasterCard. This is the most convenient way to get cash, and you know you get the correct rates. Check with your bank before you leave home what charges apply. The ATM’s normally have an withdrawal limit as low as 600.000Rp to 1.000.000Rp, but you can withdraw many times. You will receive notes of 50.000Rp or 100.000Rp.
It is important to note when changing cash rather than travelers cheques you may find that even a small irregularity on the note is not accepted. They should be absolutely perfect so make sure you bring crispy clean dollars, euros or whatever currency you prefer, US dollars and Euro may be the best choice. If the notes are clean you usually get a better rate than travelers cheques, the rates will however vary from place to place
. You easily get the best rates in the big cities, so a good advice is to change before you head to the typical tourist destinations. For some strange reason large notes get a better rate, it is advised to bring notes as big as the US$100.
Unfortunately many tourists have been ripped off by moneychangers. In major tourist areas like Kuta on Bali you want to make sure you look around to get the best rate, and ask if there is any commission. Some have even rigged their calculators, count the rupiah yourself. When counting they may even make some of the money disappear, don’t give away your own money before you have double-checked the amount. At the first suspicious sign leave and try another, most are honest.
As rates change daily you may find it difficult to change money at banks before 10 am, or until the new rate comes in. At some banks money can only be changed between 10 am and 12 noon. Tourists can open bank accounts with as little as 100.000Rp. This will give you an ATM card which you can use several places in Indonesia, Singapore and Malaysia with a limit of 2 million Rp per day, but you may have to wait a week to ten days for your card.
At banks like BNI you can choose between 3 types of accounts; Savings account in rupiah with ATM card, Deposit account in rupiah, and dollar account, where the cash remains in dollar but you can only withdraw rupiah. For the dollar account you can only draw cash at the branch where you open the account.
Credit cards are the most convenient way to settle your bill at expensive hotels, restaurants and shops, but for a budget traveler they are best used for withdrawal of money from ATM’s or to pay for airline tickets. Many travel agencies will, for mysterious reasons, add a commission of 3-4 percent if you want to use your credit card, so you better get some cash before you order your ticket. In more remote areas the credit card is useless, make sure you bring enough cash!
If your bank account back home is empty you can always get some extra money with a credit card, just remember you will have to settle this when you return home, and be prepared to pay a high interest. Don’t let that spoil your holiday though!
Indonesia is still very good value for money, especially after 1997 and the devaluation of the rupiah. The costs will of course vary a lot depending on where you go, and imported goods are always more expensive than local produce. Transportation is very cheap, many will say you get what you pay for, but even air tickets with the major airlines are relatively cheap. Tourist destinations like Bali is now a good bargain, especially outside the main seasons when prices are negotiable. Where competition is less fierce, like Maluku and Irian Jaya, accommodation may be twice as high. On Java, Bali, Sumatra, Sulawesi and Nusa Tenggara you can survive on as little as US$10 per day, on a mid-range budget you may use US$30 per day, for US$50 per day you can travel and live quite comfortably. Alcohol is relatively expensive in Indonesia, if you like to drink beer to your meal every day you must raise your budget accordingly. A large bottle of local Bintan beer cost 12.000 to 20.000Rp.
The Indonesians themselves do not normally practice tipping, but as a foreign visitor you are expected to give something for special service. People who may expect a tip are guides, taxi drivers, porters and waiters/waitresses. In restaurants service is normally included in the price, but a small tip for good service is always welcome, especially if you plan on coming back.
Except for expensive shops in the cities and shops in tourist areas where prices are fixed, bargaining is a common practice in Indonesia, especially if you want to buy handicrafts and souvenirs. Even on many hotels you can bargain if demand is low, and of course if you like to hire transport. If prices are fixed, they are displayed, but don’t always take this as a rule as many tourist shops flash insane prices.
First ask the seller about their price, then start your offer at about a third to two thirds of this if you think that is reasonable, or even lower in tourist areas. Don’t show too much interest as you are closing in on an acceptable price, if you are not satisfied stop bargaining and start walking away, often the seller will call you back and offer a lower price. Bargaining is a lot about chemistry, be polite, if the seller don’t like you he will never give you a low price. When you have accepted a price, it is very impolite to change your mind and not pay.
You should have in mind that if you have stayed a while in Indonesia you will easily start a discussion over a few hundred rupiah. Then it’s time to stop and think; how much or little is that in my own currency, and should I really not buy this thing I really like because I can not bargain for 1.000 rupiah less? Most of the people here are poor, so if you have to pay a few hundred rupiah or a dollar extra for a souvenir or a service, so what? Maybe then this beautiful wooden sculpture you put on your mantelpiece when you get home will not give you a bad feeling of having ripped off some poor guy who have spent weeks making it, and desperately needed some money for his family.
There is no such thing as a “correct” price, don’t spoil your holiday by feeling ripped off all the time. It’s probably nothing compared to what you paid to get here, and much, much less than you would have to pay at home. All westerners are considered rich here, and expected to pay more, just learn to accept it!