Malaysian Ringgit General Info
The word ringgit is an obsolete term for jagged in Malay and was originally used to refer to the serrated edges of silver Spanish dollars which circulated widely in the area during the 16th and 17th century Portuguese colonial era.
Between 1995 and 1997, the ringgit was trading as a free float currency at around 2.50 to the US dollar, but following the onset of the 1997 East Asian financial crisis, the ringgit witnessed major dips to under 3.80 to the dollar by the end of 1997 as a result of capital flight. During the first half of 1998, the currency fluctuated between 3.80 and 4.40 to the dollar, before Bank Negara Malaysia moved to peg the ringgit to the US dollar in September 1998, maintaining its 3.80 to the dollar value for almost seven years while remaining floated against other currencies. In addition, the ringgit was designated non-tradeable outside of Malaysia in 1998 to stem the flow of money out of the country.
On 21 July 2005, Bank Negara announced the end of the peg to the US dollar immediately after China's announcement of the end of the renminbi peg to the US dollar. The ringgit would experience more acute plunges in the value since mid-2014 following the escalation of the 1Malaysia Development Berhad scandal that raised allegations of political channeling of billions of ringgit to off-shore accounts, and uncertainty from the 2015–16 Chinese stock market turbulence and the effects of the 2016 United States presidential election results.
MYR - Market View
A further decline in the ringgit wouldn’t be much of a surprise to anyone who has followed its fortunes in recent years. For some time it has been one of Asia’s worst performing currencies, having been rocked by the ‘1MDB’ scandal, depreciation of the yuan and a divergence in the expectations for monetary policy between the US and Malaysia.