Editing Malaysian ringgit (section)

== History ==

=== Before independence ===

The [[Spanish dollar|Spanish-American silver dollar]] brought over by the [[Manila galleons]] was the primary currency for international trade, used in Asia and the Americas from the 16th to 19th centuries; it was eventually called the ''ringgit''. The various dollars introduced in the 19th century were itself derived from the [[Spanish dollar]]: the [[Straits dollar]], [[Sarawak dollar]] and the [[British North Borneo dollar]]. From these dollars were derived their successor currencies the [[Malayan dollar]] and the [[Malaya and British Borneo dollar]], and eventually the modern-day Malaysian ringgit, [[Singapore dollar]] and [[Brunei dollar]].

=== After independence (1967–1997) ===

On 12 June 1967, the Malaysian dollar, issued by the new central bank, [[Central Bank of Malaysia]], replaced the [[Malaya and British Borneo dollar]] at [[Par value#Currency|par]].<ref>[http://intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=4 International Economics - Historial Exchange Rate Regime of Asian Countries] {{webarchive |url=https://web.archive.org/web/20150708040945/http://intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=4 |date=8 July 2015 }}</ref> The new currency retained all denominations of its predecessor except the $10,000 denomination, and also brought over the colour schemes of the old dollar. Over the course of the following decades, minor changes were made to the notes and coins issued, from the introduction of the M$1 coin in 1967, to the demonetization of RM500 and RM1,000 notes in 1999.

As the Malaysian dollar replaced the Malaya and British Borneo dollar at par and Malaysia was a participating member of the [[sterling area]], the new dollar was originally valued at {{frac|8|4|7}} dollars per 1 [[British pound|British pound sterling]]; in turn, £1 = US$2.80 so that US$1 = M$3.06. In November 1967, five months after the introduction of the Malaysian dollar, the pound was devalued by 14.3% from US$2.80 to US$2.40, leading to a collapse in confidence for the sterling area and its demise in 1972. The new currency stayed pegged to the [[U.S. dollar]] at US$1 = M$3.06, but earlier notes of the Malaya and British Borneo dollar were devalued from US$2.80 to US$2.40 for 8.57 dollars; consequently these notes were reduced in value to 85 cents per dollar.

Despite the emergence of new currencies in Malaysia, [[Singapore]] and [[Brunei]], the Interchangeability Agreement which the three countries adhered to as original members of the currency union meant the Malaysian dollar was exchangeable at par with the [[Singapore dollar]] and [[Brunei dollar]]. This ended on 8 May 1973, when the Malaysian government withdrew from the agreement.<ref name="Interchangeability Agreement">{{cite web
 |url=http://www.mas.gov.sg/currency/currency_info/Heritage_Collection.html 
 |title=The Currency History of Singapore 
 |access-date=3 July 2008 
 |date=9 April 2007 
 |publisher=Monetary Authority of Singapore 
 |quote=Official Currencies of The Straits Settlements (1826-1939); Currencies of the Board of Commissioners of Currency, Malaya (1939-1951); Currencies of the Board of Commissioners of Currency, Malaya and British Borneo (1952-1957); Currencies of the Independent Malaya (1957-1963); On 12 June 1967, the currency union which had been operating for 29 years came to an end, and the three participating countries, Malaysia, Singapore and Brunei each issued its own currency. The currencies of the 3 countries were interchangeable at par value under the Interchangeability Agreement until 8 May 1973 when the Malaysian government decided to terminate it. Brunei and Singapore however continue with the Agreement until the present day. 
 |url-status=dead 
 |archive-url=https://web.archive.org/web/20100202075742/http://www.mas.gov.sg/currency/currency_info/Heritage_Collection.html 
 |archive-date=2 February 2010 
 |df=dmy 
}}</ref> The [[Monetary Authority of Singapore]] and the Brunei Currency and Monetary Board still maintain the interchangeability of their two currencies, as of 2021.<ref name="Interchangeability Agreement"/> The Malaysian Ringgit name was introduced in 1975.

In 1993, the currency symbol "RM" (Ringgit Malaysia) was introduced to replace the use of the dollar sign "$" (or "M$").

=== Asian financial crisis and US dollar currency peg (1997–2005) ===

Between 1995 and 1997, the ringgit was trading as a [[Float (finance)|free float]] currency at around 2.50 to the [[United States dollar|US dollar]],<ref name="graf tukaran matawang MYR-USD">{{cite web|url=http://niagaummah.com/emas-vs-wang-ringgit/ |title=Kadar Tukaran Matawang MYR – USD |access-date=14 January 2015 |publisher=niagaummah.com |url-status=dead |archive-url=https://web.archive.org/web/20151018140618/http://niagaummah.com/emas-vs-wang-ringgit/ |archive-date=18 October 2015 }}</ref> but following the onset of the [[1997 Asian financial crisis]], the ringgit witnessed major dips to under 3.80 MYR/USD by the end of 1997 as a result of [[capital flight]].<ref name="graf tukaran matawang MYR-USD" /> During the first half of 1998, the currency fluctuated between 3.80 and 4.40 MYR/USD,<ref name="graf tukaran matawang MYR-USD"/> before the [[Central Bank of Malaysia]] moved to [[Fixed currency|peg]] the ringgit to the US dollar in September 1998, maintaining its 3.80 MYR/USD value while remaining floated against other currencies. In addition, the ringgit was designated [[Non-deliverable forward|non-tradeable]] outside of Malaysia in 1998 to stem the flow of money out of the country.

While the printing of RM500 and RM1,000 notes had ceased in 1996 in response to risks of [[money laundering]] and capital flight, the underestimated effects of the financial crisis prompted the central bank to completely discontinue the use of the notes by demonetising the remaining notes in circulation beginning 1 July 1999. The two denominations hereby ceased to be legal tender and were only exchangeable directly at the central bank; at the time of the demonetization, RM500 and RM1,000 notes were each worth approximately US$130 and US$260 respectably, based on the 3.80 MYR/USD peg rate. Despite these measures, some 7.6% of RM500 notes and 0.6% of RM1,000 notes remain in circulation as of 30 January 2011. During a 2011 parliamentary session, then [[Minister of Finance (Malaysia)|Deputy Finance Minister]] [[Donald Lim Siang Chai]] asserted that a total of 150,599 and 26,018 pieces of RM500 and RM1,000 notes (RM75,299,500 worth of RM500 notes and RM26,018,000.00 worth of RM1,000 notes) have yet to be "recalled" through the central bank.<ref name="500 1000 demonetised">{{cite web |url=http://malaysianbanknotes.blogspot.my/2011/07/rm500-and-rm1000-note.html |title=The RM500 and RM1000 Note |access-date=7 December 2016 |date=3 July 2011 |publisher=malaysianbanknotes.blogspot.my |website=Blogspot}} {{unreliable source?|date=March 2018}}</ref> {{Better source needed|date=February 2024}}

The ringgit lost 50% of its value against the US dollar between 1997 and 1998, and suffered general [[Depreciation (currency)|depreciation]] against other currencies between December 2001<!--Could be earlier--> and January 2005. As of 4 September 2008, the ringgit had yet to regain its value circa 2001 against the [[Singapore dollar]] (2.07 to 2.40 MYR/SGD),<ref name="Yahoo SGD-MYR">{{cite web |url=https://finance.yahoo.com/currency/convert?from=SGD&to=MYR&amt=1&t=5y |title=Singapore Dollar to Malaysian Ringgit Exchange Rate |access-date=4 September 2008 |publisher=[[Yahoo! Finance]] |archive-url=https://web.archive.org/web/20080620213230/http://finance.yahoo.com/currency/convert?from=SGD&to=MYR&amt=1&t=5y |archive-date=20 June 2008 |url-status=dead |df=dmy-all }}</ref> the [[euro]] (3.40 to 4.97 MYR/EUR),<ref name="Yahoo EUR-MYR">{{cite web |url=https://finance.yahoo.com/currency/convert?from=EUR&to=MYR&amt=1&t=5y |title=Euro to Malaysian Ringgit Exchange Rate |access-date=4 September 2008 |publisher=[[Yahoo! Finance]] |archive-url=https://web.archive.org/web/20081201123030/http://finance.yahoo.com/currency/convert?from=EUR&to=MYR&amt=1&t=5y |archive-date=1 December 2008 |url-status=dead |df=dmy-all }}</ref> the [[Australian dollar]] (1.98 to 2.80 MYR/AUD<ref name="Yahoo AUD-MYR">{{cite web |url=https://finance.yahoo.com/currency/convert?from=AUD&to=MYR&amt=1&t=5y |title=Australian Dollar to Malaysian Ringgit Exchange Rate |access-date=4 September 2008 |publisher=[[Yahoo! Finance]] |archive-url=https://web.archive.org/web/20081010230814/http://finance.yahoo.com/currency/convert?from=AUD&to=MYR&amt=1&t=5y |archive-date=10 October 2008 |url-status=dead |df=dmy-all }}</ref>), and the [[British pound]] (5.42 to 6.10 MYR/GBP<ref name="Yahoo GBP-MYR">{{cite web |url=https://finance.yahoo.com/currency/convert?from=GBP&to=MYR&amt=1&t=5y |archive-url=https://web.archive.org/web/20070606205831/http://finance.yahoo.com/currency/convert?from=GBP&to=MYR&amt=1&t=5y |url-status=dead |archive-date=6 June 2007 |title=British Pound to Malaysian Ringgit Exchange Rate |access-date=4 September 2008 |publisher=[[Yahoo! Finance]] }}</ref>).

On 21 July 2005, Central Bank of Malaysia announced the end of the peg to the US dollar immediately after [[People's Republic of China|China]]'s announcement of the end of the [[Chinese renminbi|renminbi]] peg to the US dollar.<ref name="depeg US report">{{cite web |url=https://2001-2009.state.gov/e/eeb/ifd/2006/62012.htm |title=2006 Investment Climate Statement -- Malaysia |access-date=3 January 2008 |publisher=U.S. State Department }}</ref><ref name="depeg UK report">{{cite web |url=https://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/countries;jsessionid=GB0x53Z22QWNxd6ZQxVT7TsnQCRJvvB1yY9dFyQGcN1fVzjZ4VRJ!-538976612!-1463466175?_nfpb=true&portlet_3_5_actionOverride=%2Fpub%2Fportlets%2FgenericViewer%2FshowContentItem&_windowLabel=portlet_3_5&portlet_3_5navigationPageId=%2Fmalaysia&portlet_3_5navigationContentPath=%2FBEA+Repository%2F327%2F226122&_pageLabel=CountryType1 |title=Malaysia: Economic and political situation (2005) |access-date=3 January 2008 |publisher=UK Trade & Investment }} {{dead link|date=June 2011}}</ref><ref name="depeg China report">{{cite web |url=http://www.atimes.com/atimes/China/GG23Ad05.html |archive-url=https://web.archive.org/web/20050724000808/http://www.atimes.com/atimes/China/GG23Ad05.html |url-status=unfit |archive-date=24 July 2005 |title=Beijing's 'Thursday surprise' |access-date=3 January 2008 |author=Lenard, David M |date=23 July 2005 |publisher=[[Asia Times Online]] }}</ref> According to Bank Negara, Malaysia allows the ringgit to operate in a managed [[floating currency|float]] against several major currencies. This has resulted in the value of the ringgit rising closer to its perceived market value, although Central Bank of Malaysia has intervened in financial markets to maintain stability in the trading level of the ringgit, a task made easier by the fact that the ringgit was pegged and has remained non-tradeable outside Malaysia since 1998.

=== Post-US dollar currency peg performance (2005–present) ===
Following the end of the currency peg, the ringgit [[Depreciation (currency)|appreciated]] to as high as 3.16 MYR/USD in April 2008. The ringgit had also enjoyed a period of appreciation against the [[Hong Kong dollar]] (from 0.49 to 0.44 MYR/HKD)<ref name="Yahoo HKD-MYR">{{cite web |url=https://finance.yahoo.com/currency/convert?from=HKD&to=MYR&amt=1&t=5y |title=Hong Kong Dollar to Malaysian Ringgit Exchange Rate |access-date=7 May 2008 |publisher=[[Yahoo! Finance]] |archive-url=https://web.archive.org/web/20071222011957/http://finance.yahoo.com/currency/convert?from=HKD&to=MYR&amt=1&t=5y |archive-date=22 December 2007 |url-status=dead |df=dmy-all }}</ref> and the [[renminbi]] (0.46 to 0.45 MYR/CNY)<ref name="Yahoo CNY-MYR">{{cite web |url=https://finance.yahoo.com/currency/convert?from=CNY&to=MYR&amt=1&t=5y |archive-url=https://archive.today/20130105084504/http://finance.yahoo.com/currency/convert?from=CNY&to=MYR&amt=1&t=5y |url-status=dead |archive-date=5 January 2013 |title=Chinese Yuan to Malaysian Ringgit Exchange Rate |access-date=7 May 2008 |publisher=[[Yahoo! Finance]] }}</ref> as recently as May 2008. The initial stability of the ringgit in the late-2000s had led to considerations to reintroduce the currency to foreign trading after over a decade of being [[Internationalization|non-internationalised]]. In a CNBC interview in September 2010, [[Najib Tun Razak]], the then Prime Minister and Finance Minister of Malaysia, was quoted in stating that the government was planning the reentry of the ringgit into off-shore trading if the move will help the economy, with the condition that rules and regulations were put in place to prevent abuses.<ref>{{cite news|title=All eyes on ringgit after PM's remarks |url=http://www.btimes.com.my/Current_News/BTIMES/articles/rup0133-2/Article/ |publisher=Business Times Malaysia |author=Rupe Damodaron |date=13 September 2010 |url-status=dead |archive-url=https://web.archive.org/web/20100916025219/http://www.btimes.com.my/Current_News/BTIMES/articles/rup0133-2/Article/ |archive-date=16 September 2010 }}</ref> Despite considerations, the ringgit has continued to remain non-internationalised in a deliberate move to continue discouraging off-shore trading of the currency.<ref name="NDF curbs"/>

Political uncertainty following [[Malaysian general election, 2008|the country's 2008 general election]] and the [[Permatang Pauh by-election, 2008|2008 Permatang Pauh by-election]], falling [[Price of petroleum|crude oil prices]] in the late-2000s, and the lack of intervention by the Central Bank of Malaysia to increase already low [[Interest|interest rates]] (which remained at 3.5% between April 2006 and November 2008)<ref name="bloomberg late 2008 drop">{{cite web |url=https://www.bloomberg.com/apps/news?pid=20601087&sid=avjWue5eZMTE |title=Malaysian Ringgit Will Be a 'Washout', Institute Says (Update2) |access-date=4 September 2008 |author=Yong, David |date=4 September 2008 |publisher=[[Bloomberg L.P.|Bloomberg.com]] }}</ref> led to a slight fall of the ringgit's value against the US dollar between May and July 2008, followed by a sharper drop between August and September of the same year. As a result, the US dollar appreciated significantly to close at 3.43 MYR/USD as of 4 September 2008,<ref name="google.com USDMYR">{{cite web |url=https://www.google.com/finance/quote/USD-MYR |title=US Dollar ($) ⇨ Malaysian Ringgit (MYR) |access-date=22 July 2016 |publisher=Google Finance }}</ref> while other major currencies, including the renminbi and Hong Kong dollar, followed suit. The ringgit spiked at 3.73 MYR/USD by March 2009, before gradually recovering to 3.00 MYR/USD by mid-2011 and normalising at around 3.10 MYR/USD between 2011 and 2014.

The ringgit experienced more acute plunges in the value since mid-2014 following the escalation of the [[1Malaysia Development Berhad scandal]] that raised allegations of political channeling of billions of ringgit to off-shore accounts, and uncertainty from the [[2015–16 Chinese stock market turbulence]] and the effects of the [[2016 United States presidential election]] results. The currency's value fell from an average of 3.20 MYR/USD in mid-2014 to around 3.70 MYR/USD by early 2015; with China being Malaysia's largest trading partner, a Chinese stock market crash in June 2015 triggered another plunge in value for the ringgit, which reached levels unseen since 1998 at lows of 4.43 MYR/USD in September 2015, before stabilising around 4.10 to 4.20 to the US dollar soon after;<ref>{{cite web|url=https://finance.yahoo.com/news/malaysia-reserves-fall-again-ringgit-111114289.html|title=Malaysia reserves fall again as ringgit continues to slide|date=21 August 2015 |access-date=13 August 2016}}</ref> the currency later plummeted and hover below the 1998 lows at 4.40 and 4.50 MYR/USD, following the wake of the victory of pro-[[Protectionism|protectionist]] [[Donald Trump]] in the 2016 United States presidential election, which has raised questions of the United States' participation in the [[Trans-Pacific Partnership]] (TPP) (which Malaysia is a signatory of, and the United States had promptly pulled out from in January 2017) and [[Malaysia–United States relations#Trade and investment|Malaysia–United States trade]] as a whole (as the United States is among Malaysia's largest trading partners).

In response to the sharp drop of the ringgit in November 2016, Central Bank of Malaysia began a series of tougher crackdowns on under-the-counter [[non-deliverable forward]] trading of the ringgit in order to curb currency speculation.<ref name="NDF curbs">{{cite web|url=https://www.bloomberg.com/news/articles/2017-03-29/ringgit-trading-shrivels-offshore-as-crackdown-deters-investors|title=Malaysia's Currency Crackdown is Hitting Speculators|publisher=Bloomberg|date=29 March 2017 |access-date=21 March 2018}}</ref> Since then, the currency has seen a steady but consistent rate of appreciation against the US dollar, with significant increases since early-November 2017 following reports of positive economic performance, the restructuring of the TPP into the [[Comprehensive and Progressive Agreement for Trans-Pacific Partnership]] and increasing global oil prices. After appreciating as high as 3.86 to the US dollar as of early April 2018, the value dropped to around 4.18 MYR/USD by the end of October 2018 following increasing trade war tensions in response to the [[2018 China–United States trade war|China–United States trade war]], selloff panic from other emerging markets, as well as uncertainty in economic policy following an [[Upset (competition)|upset]] by the [[Pakatan Harapan]] coalition in the [[Malaysian general election, 2018|2018 general election]]. With the exception of the Euro, the currency's has also seen some recovery of value to pre-late 2016 levels against other major currencies, including the renminbi, British pound, Australian dollar, Japanese yen and Singaporean dollar, but remains less valuable overall than before the end of 2013.

The ringgit was ranked among the region’s worst-performing currencies through much of 2023 and early 2024, mostly due to widening interest rate differentials between the US and Malaysia. But in 2024, the currency saw an overall appreciation of 2.7% against the US dollar. It was also one of the few currencies in Asia to appreciate against the US dollar driven by external factors that previously weighed it down, alongside strengthening domestic fundamentals and a resilient domestic expenditure and further improvement in external demand to support growth in 2025.<ref>{{Cite web |last=Abellon |first=Andrea |date=2024-11-15 |title=What is Driving the Ringgit's Comeback? |url=https://amro-asia.org/what-is-driving-the-ringgits-comeback |access-date=2025-05-18 |website=ASEAN+3 Macroeconomic Research Office - AMRO ASIA |language=en-US}}</ref><ref>{{Cite web |url=https://www.bnm.gov.my/-/qb24q4_en_pr#:~:text=In%202024,%20the%20ringgit%20recorded,regional%20currencies%20experienced%20a%20depreciation. |access-date=2025-05-18 |website=www.bnm.gov.my}}</ref> This is a 39-month high against the US dollar due to resilient coordinated effort between the government and [[Bank Negara Malaysia]] and the country's promising economic prospects.<ref>{{Cite web |date=2024-12-31 |title=Ringgit closes out 2024 as top performer among major Asian currencies |url=https://www.thestar.com.my/business/business-news/2024/12/31/ringgit-closes-out-2024-as-top-performer-among-major-asian-currencies#goog_rewarded |access-date=2025-05-18 |website=The Star |language=en}}</ref>