Home   |    About Us   |   Feedback   |   Services Offered   |   Do's & Don'ts   |   Prices   |   Register   |   Contact Us   |   Sitemap  | Faq
 
 

  Relation between Percentage Shares above Support and Delivery  
  Name change of company  
  Daily Trend Of Index  
  Intraday Trend of Index  
  Intraday Nifty System  
  Results of Intraday Trend  
  Results of Daily Trend  
Trend of other markets of the world  
Technical Analysis of 20 Active Stocks  
Analysis of Indian Stock Market Future Stocks  
 Free Newsletter  

Technical Terms

 
Intraday Trading chat  Room Samples  
  Newsletters  
  Trend of stocks & their 200 DMA  
  Weekly Moving Average (NSE)  
  Weekly Moving Average (BSE)  
Commodities  
 
Currencies
MALAYSIAN RINGGIT
Introduction | Overview | Structure | History | Factors affecting change in exchange rates | Daily trend of Malaysian ringgit | Weekly trend of Malaysian ringgit
Introduction


Ringgit is the word taken from the Malay language that means, "jagged" or "anything that has rough or uneven surface" and is the name given to the currency of Malaysia. Previously, the word used to refer to the sharp edges of Spanish silver coins that were widely exchanged in the country in the past. The Malaysian ringgit, as it is called, was introduced in 1967 with the name "Malaysian dollar" and "cent" in English language and "ringgit" and "sen" in Malay language as the official monetary units. The currency is still known as Malaysian dollar unofficially and is usually denoted with the expression "RM" which stands for "Ringgit Malaysia".

ISO 4217 regulation describes the currency code i.e. MYR and numeric code i.e. 458 for Malaysian dollar. The subdivision of the currency is "sen" that divide it into 100 equal parts.

Overview


Malaysian ringgit has been one of the few strong currencies in the Asian continent. The country is one of the rapidly developing countries in the world that is experiencing the phase of industrialization. The currency of the country plays an important part in the development as it had been strong for quite some time and the policies of the central bank of the country that believes in the keeping the ringgit’s exchange rate down rather than supporting it.

When the Malaysian ringgit came into existence, it was made to peg with the US dollar and with time, the peg was removed. But in 1997, during the time of severe Asian financial crisis, the currency was re-pegged to the US dollar at a fixed rate regime @ RM3.80 to a dollar. The 7-year peg to the US dollar has now been removed and the currency has been floated against several major currencies of the world. The import and export restrictions of the currency are like the import and export of the local currency is free if the amount does not exceed 1000 ringgits. The import and export is free up till 10000 ringgits if it is pertaining to the foreign currency in the country.

Structure

Malaysian ringgit, like most of the modern currencies in the world, has coinage issues for the smaller currency units and banknotes for the larger denominations. One unit of the currency is equally divided into 100 units of sen i.e. the subunit of the currency. The second series of currency coins has been used currently since September 1989 in Malaysia and 5 denominations are minted in this series i.e. 1 sen, 5, 10, 20 and 50 sens. Till 2005, RM1 coin was also being used with other coins but it had to be withdrawn out of circulation due to problems of forgery and standardization. The obverse sides of all the coins depict different images engraved on them such as the 1 sen coin bear an image of "Rebana ubi" i.e. a traditional drum, 5 sen coin shows an image of "gasing" - a spinning top, 10 sen coin has an image of "Congkak", a mancala board game, 20 sen coin shows an image of "sirih" and "kapur" containers and a 50 sen coin depicts "Wau", a Malaysian kite. The reverse sides of the coins possess the bank value and the year in which the coin was minted. The first series of coins was issued in 1967 when the country switched over to its current currency called Malaysian dollar at that time.

The ringgit bank notes are issued in the 6 following denominations -

RM1, RM2, RM5, RM10, RM50, RM100

Since the colonial times, Malaysia has been using color code to differentiate between the different notes of different face values. The various colors/color combinations for different ringgit currency banknotes are mentioned below

  • RM1 - blue

  • RM2 - lilac

  • RM5 - green

  • RM10 - red

  • RM50 - blue/gray

  • RM100 - violet

The backsides of the notes have images showing various sectors of the Malaysian economy. The RM100 note symbolizes the manufacturing sector, RM 50 bank note depicts the mining sector, RM 10 note symbolizes transportation sector, RM 5 bank note shows image from country’s construction sector and the RM2 note symbolizes the telecommunication sector. Few commemorative bank notes have also been issued on various occasions including an RM50 polymer banknote. The production and distribution of both coinage and banknote in the currency is taken care of by the central bank of the country i.e. Bank Negara Malaysia.

History


Malaysia has a long, deep and complex history in context of the currencies that were used as a medium of exchange in the country as it had been ruled by numerous rulers that had their own currencies. The country had seen many sorts of currencies, be it the tin ingot money in which tin ingots were used as a monetary unit or animal money in which coins were minted in the shapes of various animals and insects and also currencies of the Malacca Sultanate, coinage of Kelantan and Johore, Kedah coins, Perils tin coins and Terengganu Coins, until in the start of the 16th century when Malaysia was attacked by the foreign powers of that time. First the Portuguese laid their hands on the country and started to mint their coins followed by the Dutch and then the British.

Till 1837, Spanish silver dollars were accepted as the legal tender in the country but from then onwards it changed over to the Indian rupee. Rupee served as the official monetary unit for 30 years and after that, silver dollars as a currency was re implemented. In 1903, straits dollar were looked upon as the official currency and it replaced the silver dollar again. In 1963 the thirteen states got united and soon after the union induced Malaysian dollar replacing the straits dollar. The responsibility to issue the new currency was given to the newly established Bank Negara Malaysia. The currency, until 1973, went along with the Singapore dollar and the Brunei dollar as the exchange rate between the three was maintained at par. The currency of Malaysia was termed as Malaysian dollar in the English language but Malaysian ringgit in the Malay language, but in 1975, ringgit was adopted as the sole name of the currency and it was pegged to the US dollar @ 1 dollar = RM3.80.

The sign that was used for the new currency i.e. "$" remained the same even after change of name of the currency. "RM" as the Malaysian ringgit symbol replaced the dollar symbol in as late as in 1990s. The prevailing bank note series in the country is the third one, which was issued in 1996-1999, the prior series being withdrawn from circulation. The first series was issued as and when the currency was introduced in 1967. With the adoption of new spelling system for the national language i.e. Bahasa Malaysia, a new series of banknotes were issued in 1982 with the new spellings. This series even had some of the banknotes that are not issued in the current series namely RM20, RM500 and RM1000 and had an identical design pattern like the first series. The third series was issued in the spirits of Wawasan 2020.

Factors affecting the exchange rates between two countries


The volatility in the foreign exchange rates depends upon a numerous macro economic factors that have different degrees of importance to different economies of the world. Some special and exceptional factors affecting the rates may also exist in the case of different countries. Following are shown the common factors on which the foreign exchange rate depends

  • Flow of imports and exports between the countries
  • Flow of capital between the countries
  • Relative inflation rates
  • Fluctuation limits on exchange rate imposed by the governments of the countries
  • Merchandise trade balance
  • Rate of inflation in the country
  • Flow of funds between the countries for the payment of stock and bond purchases
  • Relative growth
  • Short term and long term interest rate differentials
  • Cost of borrowings
 
   Disclaimer | Privacy Statement

Copyright crnindia.com, All rights reserved world wide