Malaysian Ringgit

Overview

The Ringgit, unofficially called the Malaysian Dollar, has been Malaysia’s official currency since 1975. Malaysia replaced the Spanish silver dollar with the Indian Rupee in 1837. After 30 years the country decided to reintroduce the Spanish silver dollar. In 1903, Malaysia changed its currency to the Straits Dollar, which was pegged at two shillings to the British Pound.

Economy

• Malaysia’s economy previously relied on the production of agricultural export commodities and minerals, but now it relies on manufacturing and services.
• There was a major change in Malaysia’s economy in the last decade, which affected most of their capital investments.
• Economic downturns in the last six years have severely damaged the country’s investments.

History

• On June 12, 1967, the Bank of Negara Malaysia, the central bank of Malaysia, issued the Malaysian Dollar to replace the British Borneo and Malayan Dollar at par.
• After it replaced the British Borneo Dollar, the Malaysian Dollar was originally valued at 8.57 dollars = 1 British Pound Sterling. Within the first 5 months, the Malaysian Dollar had decreased in value by 14.3%.
• From 1995 to 1997, the Ringgit was was trading as a free-float currency at around 2.50 to the US Dollar, before dropping to 3.80 to the Dollar by the end of 1997.
• The currency value fluctuated from 3.80 to 4.40 to the dollar before Bank Negara Malaysia pegged the Ringgit to the US Dollar in September 1998.
• As of September 4, 2008, the Ringgit still had not regained its value against the Singapore Dollar, Australian Dollar, the Euro, or the British Pound.