DEFINITION of MYR (Malaysian Ringgit)
MYR is the ISO 4217 currency code and official abbreviation for the Malaysian ringgit, the legal currency for Malaysia.
BREAKING DOWN MYR (Malaysian Ringgit)
The ringgit is often unofficially referred to as the Malaysian dollar. RM is the internationally recognized symbol for the Malaysian ringgit.
Malaysian Ringgit (MYR) Specifics and History
The Malaysian ringgit is made up of 100 sen, and is issued in denominations of 1, 5, 10, 20, 50 and 100. It is used officially by Malaysia and unofficially in border areas in Indonesia, Philippines, Thailand, as well as some parts of Ho Chi Minh City, Vietnam.
The Malaysian dollar replaced the Malaya and British Borneo dollar in June of 1967 at par. This new currency was officially referred to in "dollars" and "cents" until August of 1975 when the official name was changed to "ringgit" and "sen." In English use, the currency is still referred to in its previous form, and in the Malay language, the new form is often used. It is common for both forms to be used throughout the country.
After periods of extreme volatility during the East Asian financial crisis in the late 1990s, the central bank of Malaysia (Bank Negara) chose to peg the ringgit to the U.S. dollar at a rate of 3.80, in 1998. 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 and removed the peg on the renminbi. The initial reaction saw the ringgit appreciate in value against the U.S. dollar as well two prominent trading partners, the Hong Kong dollar and the Chinese renminbi.
The value of the ringgit is susceptible to changes in global emerging markets across and political sentiment in Malaysia. In addition, as a significant exporter of oil and natural gas, the ringgit has some correlation to commodity prices.
Offshore banks that don't have an onshore presence in Malaysia will trade the ringgit as a non-deliverable forward.