Malaysia is a Southeast Asian country known for its enchanting landscapes, diverse people, and bustling cities. Its currency is the ringgit, which is also accepted in border areas with other Asian countries, such as Thailand and Indonesia.
In this article, we explore Malaysian currency, its history, exchange rates, and some interesting facts to help you learn more about it before traveling there or investing in ringgit.
The currency of the Malaysian Federation is the Malaysian ringgit (MYR). The currency code is MYR, which is seen when requesting a currency quote, such as USD/MYR, showing the exchange rate between the US dollar and the Malaysian ringgit.
Ringgit means jagged in the Malay language - a reference to the serrated edges of Spanish coins used in the region during the 16th and 17th centuries.
The Malaysian ringgit is made up of 100 sen and issued in denominations of 1, 5, 10, 20, 50, and 100 ringgits. In the 1990s, earlier issues of 500 and 1,000 denominations were removed from circulation to help prevent money laundering. So, if you come across these denominations, know they have been demonetized and have no value.
The Malaysian ringgit is used officially in Malaysia, but it’s also accepted in border areas of Thailand, Indonesia, Vietnam, and the Philippines.
Malaysian currency may not be the strongest currency in the world, but it does have a rich history. Over the years, the names of Malaysian banknotes and coins have changed, both before and after the country gained independence from Great Britain.
The Malaysian dollar replaced the British Borneo and Malaya dollar in June. The new currency was officially referred to in dollars and cents until August 1975. Then, its name officially changed to ringgit and sen.
After the 3.8 peg was dropped in 2005, the ringgit appreciated to 3.08 against the US dollar in 2008, only to fall back to 3.73 in 2009. Then, it rose to about 3 ringgits against the US dollar in 2011 until the first half of 2013. After that, the Malaysian ringgit lost value, hitting 4.47 in 2016. Through early 2022, the ringgit was moving between 4.17 and 4.21, but currently, it’s around 4.56.
The Malaysian currency is free-floating, meaning it has a fluctuating rate determined by the foreign exchange market. With free-floating currencies, the rate depends on the demand and supply of goods, whereas a fixed rate is typically determined by the government.
The current series of Malaysian currency has “Distinctively Malaysia” as its theme, embodying the culture and beauty of the country with depictions of famous scenery, traditions, and wildlife. In addition, all ringgits include a portrait of Malaysia’s first prime minister, Tuanku Abdul Rahman.
In the late 1990s, the Asian financial crisis caused periods of drastic volatility in the Malaysian currency. For that reason, Bank Negara, the central bank of Malaysia, decided to peg the ringgit to the US dollar at a rate of 3.8 in 1988. Moreover, trading ringgit outside of Malaysia was banned because of the surge in capital outflows during the crisis.
The peg remained intact until 2005. That’s when Bank Negara returned to a floating ringgit after the People’s Bank of China removed the peg on the renminbi. As a result, the ringgit appreciated against the US dollar, the Chinese renminbi, and the Hong Kong dollar.
Ringgit’s value is subject to changes in global emerging markets, the political opinion in the country, and other economic factors, such as the bull vs. bear market regarding the currency. Additionally, the Malaysian ringgit is somewhat correlated to commodity prices since Malaysia exports natural gas and oil.
The current exchange rate is around 4.56 USD/MYR, meaning a US dollar is worth around 4.56 ringgits in the foreign exchange markets. However, you won’t get that exchange rate when you exchange your dollar for ringgits because the rate you get will include fees, whether you buy ringgits through a bank, a currency exchange outlet, or a credit card.
Currency exchanges post their current rates, while banks and credit cards typically post their fee as a percentage to be added to the amount of money exchanged.
You can buy Malaysian ringgits online or at retail outlets operated by foreign currency exchange companies. If you’re already in Malaysia, you can exchange your currency for ringgits at banks, bank ATMs, or currency exchange outlets.
But if you’re still at home planning to visit this beautiful country, it’s better to buy ringgits before your trip to avoid hefty rates and other currency issues you may encounter in a foreign country. And one of the best ways to do that is through US First Exchange. We have currencies from every corner of the world and at competitive rates. All you need to do is place your order through our website from the comfort of your home, and it will be delivered to you in no time.
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