Editing Malaysian ringgit (section)

=== 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.