Malaysian Ringgit (MYR): Definition, Currency Symbol, and Exchanging

What Is the Malaysian Ringgit (MYR)?

The Malaysian ringgit is the currency of the Malaysian Federation, the Southeast Asian nation. The currency abbreviation for the currency is RM.

The currency code for the ringgit is MYR. This is the code seen when accessing a currency quote such as USD/MYR, which shows the rate of exchange between the U.S. dollar (USD) and the Malaysian ringgit.

In the Malay language, ringgit means jagged, a reference to the serrated edges of Spanish coins commonly used in the region in the 16th and 17th centuries.

As of the end of 2023, one Malaysian ringgit was worth about 22 cents.

Understanding the Malaysian Ringgit (MYR)

The Malaysian ringgit is made up of 100 sen. It is issued in denominations of one, five, 10, 20, 50, and 100 ringgits.

Earlier issues of 500 and 1,000 denominations were removed from circulation in the 1990s to help curb money laundering. These denominations have been demonetized and have no value.

The Malaysian ringgit is used officially by Malaysia and is also commonly accepted in border areas of Indonesia, the Philippines, Thailand, and Vietnam.

The Malaysian dollar replaced the Malaya and British Borneo dollar in June 1967 at par. The new currency was officially referred to in dollars and cents until August 1975, when its name was officially changed to ringgit and sen.

Malaysian Ringgit Price History

After the 3.8 peg was dropped in 2005, the currency appreciated to 3.08 against the USD in 2008. It then fell back to 3.73 in 2009. After that it experienced several more ears of appreciation, rising to about 3 ringgits per USD in 2011 through the first half of 2013.

The ringgit then lost value, hitting 4.47 in 2016.

Through early 2022, the MYR was moving between 4.17 and 4.21 per USD.

The Malaysian Economy

The Asian financial crisis of the late 1990s caused periods of extreme volatility in the Malaysian currency. In response, in 1998 the central bank of Malaysia (Bank Negara) chose to peg the ringgit to the U.S. dollar at a rate of 3.80.

Because of the surge in capital outflows during the crisis, trading ringgit outside of Malaysia was banned.

The peg remained intact until 2005 when Bank Negara went back to a floating ringgit after the People's Bank of China removed the peg on the renminbi. As a result, the ringgit appreciated in value against the U.S. dollar, the Hong Kong dollar, and the Chinese renminbi.

What Affects the Ringgit's Value

The value of the ringgit is susceptible to changes in emerging markets as well as political sentiment in Malaysia. In addition, the ringgit has some correlation to commodity prices, as Malaysia is an exporter of oil and natural gas.

Offshore banks that don't have an onshore presence in Malaysia trade the ringgit as a non-deliverable forward. In 2016 the Bank Negara started cracking down on these as well. The currency remains non-tradable offshore.

Example of Buying and Selling Malaysian Ringgits

Assume you want to travel to Malaysia. Once you get there, you look up a quote online and see that the current exchange rate is 4.59 USD/MYR. That means that a U.S. dollar is worth 4.15 ringgits in the forex markets.

You won't get that exchange rate when you exchange your dollars for ringgits, though. Whether you buy ringgits through a bank, a currency exchange outlet, or a credit card, the rate you get will include fees.

Currency exchanges post their current rates, which include fees. Banks and credit card issuers usually post their fee as a percentage to be added to the amount of money exchanged.

Expected Exchange Fees

You can expect the rate you get to be 3% to 5% above the current exchange rate. So if you want to buy MYR with $500, instead of getting 4.59 for each USD, you'll get about 4.36 (5% less). In other words, your $500 buys 2,180 MYR (500 x 4.36) instead of the 2,295 (500 x 4.59).

The same applies when you leave Malaysia and want to convert your remaining cash back into U.S. dollars. You will again pay about 5% of the amount exchanged in fees.

The Bottom Line

The Malaysian ringgit is not one of the 180 or so currencies that trade in the foreign exchange, or forex, market.

It is, however, an international tourist destination given its tropical climate, historical attractions, and multi-cultural population. Visitors to Malaysia can exchange money before traveling to the country or at banks and ATMs in the country on arrival.