The value of the Malaysian currency has been relatively stable during the previous two decades, owing to the country’s sustained economic growth and regular official intervention in the currency exchange rate. The Malaysian dollar was first issued in 1973, and its exchange rate was roughly RM2.45 per US$1 at the time.
At the same time, the Malaysian dollar was made the sole legal money in the country, with Singapore and Brunei currencies being banned from free circulation. The government updated its exchange control regulations on a regular basis, liberalizing the controls even more.
The Malaysian ringgit was worth RM2.48 per US$1 in 1985, and the currency rate stayed virtually stable until the Asian financial crisis of 1997.
Inflationary pressure was quite low from 1973 and 1997, with a high inflation rate of roughly 17 percent in 1974. A very high rate of savings aided the remarkable stability. With a savings rate of over 40% of GDP, Malaysia has one of the highest savings rates in the world.
Malaysians, on the other hand, borrow freely, with a major share of their assets going into the rising property and stock markets. By the end of 1997, outstanding loans amounted to 170 percent of GDP, one of the highest percentages in the world.
Malaysia’s banking sector is well-established, with 38 commercial banks (14 international banks and 12 merchant banks) operating in the country in 1996.
The ringgit has gone through a lot of evolution in its very short history as a currency, and we’re sure there’s an interesting fact or two about it that you’ve never heard about….
“Jagged” is the meaning of the word “Ringgit.”
The Spanish silver dollar was a popular kind of currency during the Portuguese colonial period.
The unique qualities of this currency were the rugged and irregular edges, hence the Malays of the time referred to them as “ringgit,” which means “the jagged ones.” The term “Malaysian currency” is now exclusively used to refer to the Malaysian currency.
The old 1 sen coin can still be used as money
As part of a plan to phase out the 1 sen coin, a rounding system was implemented in 2008, in which the total bill of any purchase was rounded to the nearest 5 sen. Since we already have the RM1 banknote, the RM1 coin has also been demonetized for three years.
Despite this, you can still use these coins as legal tender if you have them in your purse or around the house – but only for payments up to RM2. However, the vendor would most likely become irritated and possibly refuse to accept it.
So it could be wise to keep them or exchange them at a nearby bank.
Referred to called as “Dollar”
If you’ve ever heard someone say something costs “ten dollars” when you know it costs ten ringgit, you’re probably thinking they’re making a translation error. While they may be incorrect now, they would have been correct before August 1975.
Malaysia, Brunei Darussalam, and Singapore began issuing their own currencies (all called the “dollar”) in 1967 to replace the Malaya and British Borneo Dollars, which had replaced the Malaysian Dollar and Sarawak Dollar in 1953, the Straits Dollar in 1939, and the original Spanish silver dollar in 1898.
With the introduction of the new Malaysian, Bruneian, and Singapore Dollars, the three governments decided to sign a Currency Interchangeability Agreement to make their currencies interchangeable. Malaysia, on the other hand, left the agreement later in 1973. The official names of the Malaysian currency were changed to Ringgit and Sen two years later.
Despite this, the dollar sign ($) was kept on the RM1 coin produced in 1989 until 1993. Some adjustments take time.
A Cool Security Feature on the New 50 Sen Coin
The most recent series of coins in circulation, which includes gold-colored 50 sen and 20 sen coins, was released in 2012. There was also a funny little security feature on it that you probably aren’t aware of.
A latent image of the number “50” and the word “sen” can be seen by tilting the coin on its reverse side. It’s very cool because these extra security elements are usually reserved for banknotes, but now we have them on our coins as well.
As it turns out, the history of Malaysian currency from the RM to the Sen can be just as rich and fascinating as the history of our food, music, and culture. Who would have guessed?
So, the next time you take out your Malaysian currency, realize that you’re carrying important bits of Malaysian history in your hands.
Understanding the Malaysian Ringgit
The Malaysian ringgit is made up of 100 sen and comes in denominations of one, five, ten, twenty, fifty, and one hundred sen. Since the 1990s, the 500 and 1,000 denominations have not been used to aid combat money laundering. The value of these denominations has been demonetized.
Malaysia uses the ringgit both officially and unofficially in border areas with Indonesia, the Philippines, Thailand, and sections of Ho Chi Minh City, Vietnam.
In June 1967, the Malaysian dollar replaced the Malayan and British Borneo dollars at par. The official names for this new currency were “dollars” and “cents” until August 1975, when they were changed to “ringgit” and “sen.”