Malaysian Ringgit Currency - What is MYR?
The Malaysian ringgit, also known as the Malaysian dollar, is the currency of Malaysia. Regulated by Bank Negara Malaysia (BNM), Malaysia's central bank, the ringgit trades under the symbol RM and the currency code MYR. The ringgit is composed of 100 sen.
The History Of The Malaysian Ringgit
First Series Of Banknotes/Coins: 1967: BNM began issuing the Malaysian dollar on June 12, 1967, the day that it obtained sole authority to print the Southeast Asian nation's currency. Previously, the Malayan dollar traded against the sterling at £2 per 4 Malayan dollars under the Currency Board system. Within that system, the Currency board was responsible for making conversions between sterling and Malayan dollars.
When Malaysia's central bank started issuing the ringgit, the governments of Malaysia, Brunei and Singapore created an accord whereby the Malayan dollar would count as legal tender until the end of 1968. Also, a system was set up so that the Malayan dollar would be removed and given to the Currency board for conversion.
Geoffrey Colley, a coin designer who provided artwork for the coinage used in many countries, designed Malaysia's first set of coins. The obverse of these units of currency contained a floral pattern along with the year of issue and denomination, while the common reverse displayed the Southeastern Asian nation's Parliament House. All these coins bear the initials "GC," to abbreviate the name of their designer.
This first issue of ringgit-denominated coins started circulating in denominations of 1 sen, 5 sen, 10 sen, 20 sen and 50 sen. In 1971, Malaysia's central bank added RM1 coins to these denominations.
BNM issued its first series of Malaysian dollar banknotes in June 1967. Bearing the image of Tuanku Abdul Rahman, who served as Malaysia's first Yang di-Pertuan Agong (or Head of State), these units of currency were printed with denominations of RM1, RM5, RM10, RM50 and RM100.
Second Coin Series: 1989: In 1989, BNM started circulating a second series of ringgit-denominated coins. These coins feature Malaysia's national flower, the Hibiscus rosa-sinensis, on the obverse, as well as the year they were minted on the denomination.
The flip side, or reverse, bears items that are specific to Malay culture, and Malaysia's central bank issued this series as a "Cultural Artifact Series." However, the group of coins has earned a different name from many Malaysian coin collectors, as the majority of them call it the "Bunga Raya Series." Low Yee Kheng designed this series.
Withdrawal Of RM1 Coin: 1989: Malaysia's central bank announced late in 2005 that the RM1 coin would be withdrawn from circulation. At the time, BNM noted that users of the nation's currency were likely to favour other coins, and that RM1 coins made up less than 1% of the total value of Malaysia's currency.
The central bank announced plans to remove this currency in 2005, declaring that users could exchange these coins between Sept. 7 and Dec. 6 of that year. Further, BNM informed the public that businesses were obligated to accept these coins as legal tender until Dec. 6, 2005.
Third Series Of Banknotes: 1996: Malaysia's central bank began issuing a third series of banknotes in 1996. These bills came in denominations of RM1, RM2, RM5, RM10, RM50 and RM100, and feature the theme "Wawasan 2020," which involves the progress the nation has been making toward becoming a more developed nation.
In January 2004, BNM started issuing new RM10 notes that contained an optical variable holographic strip in an effort to improve security. Previously, only the two highest denominations (RM50 and RM100) featured these strips.
Implementing A Rounding Mechanism: The central bank of Malaysia introduced a Rounding Mechanism affecting over-the-counter payments that became fully effective as of April 1, 2008. Pursuant to this new setup, bills were rounded to the closest multiple of 5 sen. For example, if a bill came out to RM5.01 or RM5.02, the amount owed would simply be reduced to RM5. However, in the instance that the bill totaled RM5.03 or RM5.04, it would be rounded up to RM5.05.
When explaining this move, BNM named several benefits that would extend to businesses, consumers and even the Southeastern Asian nation's government. The central bank indicated that eliminating the RM1 coin would reduce the Malaysian government's costs. In addition, the financial institution contended removing the unit of currency from circulation would expedite payments and make them more convenient, as well as reducing handling expenses for consumers and businesses.
Fourth Series Of Banknotes: 2012: BNM started issuing its fourth series of banknotes on July 16, 2012. This new series of banknotes, which contained denominations of RM1, RM5, RM10, RM20 and RM100, drew upon a wide range of innovative features to help ensure security.
Malaysia's central bank announced at the time that the old notes would remain legal tender and circulate alongside the new series. It was also revealed that the RM50 note, which has been in circulation since December 2007, would continue to be legal tender. This series also reintroduced the RM20 note.
BNM is responsible for managing monetary policy in the Southeast Asian nation. The central bank, which was founded in 1959 and operates under the Central Bank of Malaysia Act 2009, leverages this policy in an attempt to ensure financial and monetary stability. By doing so, the central bank hopes to maintain an ideal environment for growth that can remain viable in the long term. One key facet of sustainable growth is price stability, and in this spirit, the financial institution aims to keep inflation low. The monetary policy also aims to keep exchange rates stable.
The financial institution helps manage economic development, and it keeps a close eye on key economic indicators such as asset prices and consumer debt in order to maintain economic stability. To meet its objectives, the central bank has harnessed monetary policy not only by influencing interest rates, but also through prudential and credit policies.
The financial institution used policy to meet these goals during the Asian financial crisis of 1997, when the central bank utilised monetary tightening in an effort to bring surging debt under control.
As part of these efforts, Malaysia's central bank imposed prudential guidelines involving real estate and stock in March 1997. The financial institution also increased the three-month interbank rate from 7.5% in July 1997 to 10% in February 1998. In October 1997, the central bank intensified its efforts by implementing additional prudential policies with the intention of keeping the growth in credit in line with the rate of economic expansion.
BNM announced in February 1998 that it was introducing new policy measures in an effort to bolster credit markets, tighten monetary policy and make the interest rate structure more closely reflect existing market conditions. This included providing commercial banks, finance companies and merchant banks with lower statutory reserve requirements.
Economy Of Malaysia
Malaysia has enjoyed many years of robust growth, and its GDP PPP was US$747 billion in 2014 and US$800 billion in 2015. The World Bank has singled out the nation's economy for expanding at an average rate of more than 7% for 25 years or more. This expansion was stymied by the Asian financial crisis and the global financial crisis, but the nation grew at an average annual rate of 5.5% between 2000 and 2008 and 5.7% between 2010 and the time of report in October 2015.
Malaysia also benefits from a low unemployment rate, which was 2% in 2014. Inflation was modest that year, as this key economic indicator was 3.1%.
Malaysia has a diversified export base, which includes natural gas, electrical appliances, electronic components and palm oil. Malaysia's government imposed a Goods and Services Tax in 2015 in an effort to expand the nation's sources of revenue.
In 2014, Malaysia's top trading partners were Singapore, which contributed 14.2% of the Southeast Asian nation's exports and 12.5% of its imports; China, which accounted for 12.1% of exports and 16.9% of imports; and Japan, responsible for 10.8% of exports and 8% of imports.
The Securities Commission Malaysia (SC), which was established in 1993, is a statutory body vested with the authority to regulate Malaysia's capital markets. More specifically, the SC is responsible for supervising securities, governing exchanges and ensuring that financial institutions act in an appropriate manner. Ultimately, the statutory body is responsible for protecting investors.
Major Malaysian Ringgit Currency Pairs
Although the Malaysian ringgit can be exchanged for many different currencies, the top conversion is MYR/USD. Other popular exchange rates for the currency are MYR/AUD, MYR/GBP, MYR/EUR, MYR/INR and MYR/SGD.
Ringgit Banknotes And Coins
Malaysia's banknotes have come in a wide range of colors, and the BNM is the only organisation that has the authority to issue currency. The latest series, which began circulating in 2012, improves security by harnessing various technologies. BNM also announced at the time that previously released notes would continue to serve as legal tender.
The current coinage includes coins denominated in 1 sen, 5 sen, 10 sen, 20 sen and 50 sen.
Malaysian Ringgit Around The World
The Ringgit is not currently pegged to any currencies, but during the Asian Financial Crisis, the BNM imposed a fixed exchange rate of 3.8RM per US$1.
In August 2015, Prime Minister Najib Razak announced the creation of an economic task force amid sharp declines in the Ringgit's value. Najib's committee included former Premier Mahathir Mohamad and former Second Finance Minister Nor Mohamed Yakcop, who collaborated with Mahathir to develop the currency peg and capital controls previously used by the Southeast Asian nation. However, Dr. Zeti Akhtar Aziz, Governor of the BNM, declared that Malaysia wouldn't adopt a currency peg again.
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