page_title: 1997 Asian financial crisis
section_title: Indonesia
hierarchical_section_title: 1997 Asian financial crisis / Countries affected / Indonesia
caption_attribution_description: English: Mr. Suharto presented his address of resignation as President of the Republic of Indonesia at Merdeka Palace Jakarta, 21 May 1998. (original caption) Русский: Мистер Сухарто заявляет о своей отставке с поста президента Республики Индонезия во дворце Мердека, 21 мая 1998 года. (оригинальная подпись)
context_page_description: The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion.
  The crisis started in Thailand on 2 July, with the financial collapse of the Thai baht after the Thai government was forced to float the baht due to lack of foreign currency to support its currency peg to the U.S. dollar. Capital flight ensued almost immediately, beginning an international chain reaction. At the time, Thailand had acquired a burden of foreign debt. As the crisis spread, most of Southeast Asia and Japan saw slumping currencies, devalued stock markets and other asset prices, and a precipitous rise in private debt.
  Indonesia, South Korea, and Thailand were the countries most affected by the crisis. Hong Kong, Laos, Malaysia and the Philippines were also hurt by the slump. Brunei, mainland China, Singapore, Taiwan, and Vietnam were less affected, although all suffered from a loss of demand and confidence throughout the region. Japan was also affected, though less significantly.
context_section_description: In June 1997, Indonesia seemed far from crisis. Unlike Thailand, Indonesia had low inflation, a trade surplus of more than $900 million, huge foreign exchange reserves of more than $20 billion, and a good banking sector. But a large number of Indonesian corporations had been borrowing in U.S. dollars. During the preceding years, as the rupiah had strengthened respective to the dollar, this practice had worked well for these corporations; their effective levels of debt and financing costs had decreased as the local currency's value rose.
  In July 1997, when Thailand floated the baht, Indonesia's monetary authorities widened the rupiah currency trading band from 8% to 12%. The rupiah suddenly came under severe attack in August. On 14 August 1997, the managed floating exchange regime was replaced by a free-floating exchange rate arrangement. The rupiah dropped further. The IMF came forward with a rescue package of $23 billion, but the rupiah was sinking further amid fears over corporate debts, massive selling of rupiah, and strong demand for dollars. The rupiah and the Jakarta Stock Exchange touched a historic low in September. Moody's eventually downgraded Indonesia's long-term debt to "junk bond".
  Although the rupiah crisis began in July and August 1997, it intensified in November when the effects of that summer devaluation showed up on corporate balance sheets. Companies that had borrowed in dollars had to face the higher costs imposed upon them by the rupiah's decline, and many reacted by buying dollars through selling rupiah, undermining the value of the latter further. Before the crisis, the exchange rate between the rupiah and the dollar was roughly 2,600 rupiah to 1 U.S. dollar. The rate plunged to over 11,000 rupiah to 1 U.S. dollar on 9 January 1998, with spot rates over 14,000 during 23–26 January and trading again over 14,000 for about six weeks during June–July 1998. On 31 December 1998, the rate was almost exactly 8,000 to 1 U.S. dollar. Indonesia lost 13.5% of its GDP that year.
  In February 1998, President Suharto sacked Bank Indonesia Governor J. Soedradjad Djiwandono, but this proved insufficient. Amidst widespread rioting in May 1998, Suharto resigned under public pressure and Vice President B. J. Habibie replaced him.
  As a result of the financial crisis that hit the country, many factors arising from all aspects including sports broadcasts broadcast on Indonesian television include:
  1. All 6 Indonesian television (TVRI, RCTI, SCTV, MNC TV (formerly known as TPI), ANTV and Indosiar) was unable to secure the official broadcast of the 1998 Formula One season despite ANTV was under contract of Formula One's broadcasting rights in Indonesia until 1999. RCTI finally re-secured the broadcast for 1999
  2. The 1997-98 Serie A, 1997-98 Bundesliga and 1997-98 La Liga which was originally broadcast by ANTV was forced to stopped broadcasting before the end of the season. But this did not affect the 1997-98 FA Premier League as they had already broadcast it until the end of the season
  3. All television stations in Indonesia have limited broadcast schedules with an average ending broadcast hour at 11:30 pm
caption: Fall of Suharto: President Suharto resigns, 21 May 1998.
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