The Malaysian ringgit (MYR) is the official currency of Malaysia. Adopted in 1999, the ringgit has seen its fair share of ups and downs over the past two decades. This in-depth guide takes a close look at the history, value, exchange rates, forecasts, and role of the MYR in the Malaysian and global economy.

A Brief History of the Malaysian Ringgit

Malaysia has used several different currencies throughout its history. Prior to the introduction of the ringgit, Malaysia employed the Malaya and British Borneo dollar from 1953 to 1967. In 1967, the Malaysian dollar replaced the Malaya and British Borneo dollar as the country’s legal tender.

On September 1st, 1975, after leaving the sterling area, the Malaysian dollar was pegged to the US dollar at a rate of around MYR 2.50 to USD 1. The ringgit was introduced in 1999 during the Asian financial crisis as Malaysia looked to establish its own stability and recover economically.

The word “ringgit” means “jagged” in Malay and refers to the serrated edges of silver Spanish dollars which circulated widely in the area during the Portuguese colonial era.

Current Value and Exchange Rates

As of August 2023, the exchange rate for the Malaysian ringgit is approximately:

  • MYR 4.44 to USD 1
  • MYR 4.68 to EUR 1
  • MYR 5.41 to GBP 1
  • MYR 0.033 to JPY 100
  • MYR 0.62 to AUD 1
  • MYR 3.07 to SGD 1

The ringgit is currently ranked as the 13th most traded currency in terms of global foreign exchange market turnover. It has considerably lost value against major world currencies since being pegged to the US dollar.

Role in Malaysian Economy and Monetary Policy

The ringgit is an integral factor shaping Malaysia’s open economy. As a free-float currency, the MYR exchange rate reflects economic fundamentals and market forces according to Bank Negara Malaysia. A weaker ringgit is seen as beneficial to Malaysia’s export-oriented economy.

Malaysia employs a managed float system, allowing the central bank (Bank Negara Malaysia) to influence the MYR exchange rate when necessary to ensure stability and competitiveness. The central bank regulates liquidity through various policy rates and instruments.

Inflation targeting has been the central bank’s primary monetary policy strategy since 2010 with a focus on price stability. The overnight policy rate (OPR) is the key interest rate governing Malaysia’s monetary policy.

Drivers of Ringgit Performance

There are several key factors that influence the strength and performance of the Malaysian ringgit:

Economic Growth and Outlook

Malaysia’s GDP growth, inflation, employment rates, trade balances, business sentiment, infrastructure spending and other economic indicators have a major effect on the ringgit’s valuation. A strong economic outlook tends to appreciate the MYR while slow growth depreciates it.

Commodities – Oil and Palm Oil Exports

As a net exporter of oil and the world’s 2nd largest palm oil producer, Malaysia’s currency is closely tied to global crude oil and palm oil prices. Higher oil and commodity prices traditionally lift the ringgit by improving export revenues.

Interest Rates

As an emerging market, the ringgit is sensitive to interest rates, especially the Fed Funds Rate. When the US raises rates, it tends to strengthen the US dollar against the ringgit. Meanwhile, higher Malaysian interest rates make MYR assets more attractive for foreign capital inflows.

Financial and Political Stability

Investor sentiment towards Malaysia is reflected in the ringgit’s value. Political instability, lower credit ratings, capital outflows, and lack of reforms tend to negatively impact the currency. Financial and political stability support a stronger MYR.

Historical Exchange Rates (2000-Present)

Here is a timeline outlining the Malaysian ringgit’s exchange rate history against the US dollar since 2000:

  • January 2000 – MYR 3.80 to USD 1
  • January 2005 – MYR 3.80 to USD 1
  • July 2005 – Malaysia removed the MYR peg to the USD and adopted a managed float system
  • January 2010 – MYR 3.50 to USD 1
  • June 2011 – MYR 3.02 to USD 1
  • January 2015 – MYR 3.49 to USD 1
  • January 2020 – MYR 4.08 to USD 1
  • March 2020 – MYR hit an all-time low of 4.43 during Covid pandemic
  • August 2022 – MYR 4.46 to USD 1
  • Current – MYR 4.44 to USD 1 (August 2023)

The ringgit has steadily depreciated versus the US dollar over the past two decades, reflecting Malaysia’s cultivated role as an export-driven economy. The impacts of the global financial crisis, recovery period, Covid-19 crisis, and rising US interest rates have driven periodic volatility and gradual softening of the MYR.

Outlook and Forecasts for the Ringgit

Economic analysts and institutions expect the Malaysian ringgit to remain relatively soft against the US dollar over the next 1-2 years.

Here are some major MYR outlook projections and forecasts:

  • HSBC: Sees the ringgit averaging 4.50 to the dollar by end of 2023. Cites strong exports providing support.
  • Standard Chartered Bank: Predicts the ringgit will hit 4.55 to the dollar by the first quarter of 2024 as Malaysia’s fundamentals remain solid.
  • Moody’s Analytics: Forecasts the MYR will hover around 4.48 to the dollar through 2024 due to Malaysia’s stable growth prospects but somewhat elevated inflation and oil prices.
  • OANDA: Believes MYR could depreciate to 4.60 to the dollar by mid-2024 as Malaysia’s economy faces headwinds.
  • UOB: Expects the ringgit to underperform regional peers and average 4.50-4.60 for the next 6-12 months.

Benefits and Risks of the Ringgit for Malaysia

As with any currency, using the Malaysian ringgit as legal tender carries both advantages and disadvantages from economic and policy standpoints.


  • Monetary sovereignty – As the official currency, the MYR provides Malaysia with full monetary authority and policy flexibility.
  • Exchange rate buffer – The floating MYR acts as an automatic stabilizer, absorbing economic shocks through exchange rate adjustments.
  • Trade advantage – A relatively weaker MYR supports Malaysia’s export competitiveness, especially for commodities and electronic goods.


  • Import inflation – Depreciation of the ringgit makes importing foreign goods more expensive, fueling inflationary pressures.
  • Vulnerability to volatility – Speculation and oscillating capital flows can exacerbate ringsgit volatility during times of uncertainty.
  • Reliance on exports – Having a weak currency that relies on exports for growth creates dependence on external demand conditions.

Usage and Availability of the Malaysian Ringgit

The ringgit is the official currency for all transactions and pricing within Malaysia. Foreign currencies are not accepted or used for everyday spending.

MYR banknotes come in denominations of RM1, RM5, RM10, RM20, RM50, and RM100. Rarely used coin denominations include 5, 10, 20, and 50 sen.

The ringgit is an internationally traded currency and available for exchange at most banks and airports around the world. However, the MYR is not frequently used outside of Malaysia.

Within the country, ringgit can be obtained via ATMs, banks, money changers, and merchants. Credit cards and PayPal are widely accepted for purchases in Malaysia using the local currency.

Tips for Travelers Visiting Malaysia

Here are some tips for travelers planning to visit Malaysia and use the ringgit:

  • Check current exchange rates and convert your home currency into MYR before arriving in Malaysia. Rates at the airport are usually poor.
  • Major credit cards and debit cards are accepted at most retailers, hotels and restaurants in cities. But always carry some small bills (MYR10-MYR50) for street markets, taxis, and food stalls.
  • Get a PayPal or multi-currency account. PayPal is commonly used for Malaysian online transactions and acts as a buffer from exchange rate volatility.
  • Withdraw ringgit from a local Malaysian ATM which usually offer the best rates on debit card cash withdrawals. Inform your bank you are traveling to prevent account blocks.
  • Be aware of currency exchange scams promising much higher rates or rigged calculators. Only use licensed money changers and count your money carefully.
  • Keep receipts from money changers. This provides records of transactions and exchange rates in case of disputes.
  • The US dollar and Singapore dollar are also accepted at certain tour operators, hotels, and high-end retailers in Malaysia’s main cities.


In summary, the Malaysian ringgit has seen ups and downs since its inception over 20 years ago. It acts as an engineered “shock absorber” for the country’s open, export-driven economy. While the ringgit is expected to remain relatively soft going forward, Malaysia’s strong economic fundamentals should provide underlying support. For travelers, using a mix of MYR, credit cards, and mobile payment options offers the best experience. As Malaysia continues pursuing development goals, the globally important role of the ringgit is bound to evolve and grow.