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Currency

Malaysia - Currency


The official currency of Malaysia is the Malaysian ringgit (MYR). One ringgit is then divided into 100 sen to form smaller denominations of the currency. Widely available in circulation are notes worth RM 100, RM 50, RM 20, RM 5 and RM 1 each. There are also 4 coins which are frequently used; 50 sen, 20 en, 10 sen and 5 sen. In the northern parts of East Malaysia, 10 sen is called kupang, so 20 sen would be referred to as 2 kupang. This is mainly a northern term but it can be heard in other parts of the country, too. The value of the ringgit has fluctuated quite a bit over recent years, but has generally stayed with a value of 2.5 – 4.0 ringgit being equivalent to 1 US dollar.

Introduction of the currency

On 12 June 1967, the new central bank, Bank Negara Malaysia (which remains the country’s central bank to this day), replaced the Malaya and British Borneo dollar with the introduction of a new currency, then called the Malaysian dollar. It came in with immediate effect, introduced with exactly the same value as the previous currency. Although the currency was the same then as it is today, the use of the dollar sign to represent the currency was not replaced by the letters RM until around 1993. RM is used internally to refer to the currency, where internationally the full code MYR is more commonly used.

Etymology

The word ringgit comes from the Malay word for jagged. It was originally used to refer to the silver Spanish Dollars used during the Portuguese colonial era in the 16th and 17th centuries as all of the coins had serrated edges. The word has since been adopted to refer to the current Malaysian currency, even though the coins have smooth edges. The Malay words ringgit and sen were only adopted as the official names of the currency in August 1975, until that point they had been known as dollars and cents in English and in some parts of the country this remains the case.

Coinage

The current series of coins is the third that Malaysia has minted since the introduction of the currency. Unlike many currencies in Europe, the value of a Malayisan coin increases with its size. The 50 sen coin is the largest, followed by the 20 sen, 10 sen and 5 sen coins in that order. The two lower value coins are made from stainless steel and so appear silver in colour, whereas the 20 sen and 50 sen coins are made of nickel brass and appear more golden.

New RM50 Note

A new 50 ringgit note was introduced in 2008. The newly designed note retains green-blue colour of its predecessor, but is given a new theme, dubbed the "National Mission". This theme expresses an idea of economic growth and the notion of the ringitt becoming more valuable following Malaysia's economic transformation to high performance in industries such as agriculture, manufacturing and services. The note depicts a portrait of the country’s first king (Yang di-Pertuan Agong – Tuanku Abdul Rahman) on the right hand side, and the hibiscus, the national flower of Malaysia, is pictured in the centre. The patterns surrounding the edges of the banknote are designed to reflect the textile and embroidery industry in Malaysia, a traditional craft that has been passed down through the generations.

Counterfeit Notes

Forgery is not a huge problem in Malaysia, with on average only 13 counterfeit notes detected per million ringgit in circulation. The international guidelines state that when the ratio of forged notes reaches more than 20 per million issued, then this is the benchmark for alert. Like most modern currencies, the ringgit banknotes are hard to forge; the embossing of the detail requires the skill of a trained artist, as the pattern has to be traced from the note and copied on to an embossing plate. The notes also have security features which include micro letterings, invisible fluorescent elements and an embedded security thread. Another huge challenge is getting the watermark right. But perhaps the biggest difficulty is getting the serial numbers right. The serial number on a Malaysian bank note must be unique, but it is not just the letters and numbers which change but the font sizes also vary.

There is technology available to generate these numbers but it comes at a high price. To make a passable fake of a ringgit banknote then you have to invest in some pretty expensive kit. These security measures are all helping to keep down the level of counterfeits in circulation. If you are worried about having a counterfeit note, check the 6 elements mentioned above against another banknote and you should be able to ascertain whether or not it is real.




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