Australian Dollar to Malaysian Ringgit exchange rates aren't all the same.
The total cost you are charged by your bank or foreign exchange provider consists of a margin from the interbank mid-rate plus fees.
These margins and fees vary significantly for International Money Transfers and Travel Money transactions as shown below.
90-DAY TREND: At 2.8287 AUD/MYR is trading 0.5% below the average 2.8441 with a range 2.8125 to 2.8857. There are no current alerts. Updated: 08:01-AEDT21:01-GMT16:01-EST
Exchange rates can vary significantly depending on the transaction type (transfer, cash or card), currency pair and amount. The below table shows an example of total costs charged by FX specialists and banks for AUD/MYR International Money Transfers. Costs are calculated against the current interbank mid-rate.
Example of the margins and possible savings when you order travel money online with a currency specialist rather than in-person from banks and currency kiosks.
When determining the best time to make a foreign exchange transaction, in this case the AUD vs MYR, you should pay attention to the recent market trends for both currencies.
Australian Dollar (AUD)
At the end of October the AUD surged to a three month high against the US dollar following the third rate cut in a year by the US Federal Reserve. The gains were mainly due to the fall in the US dollar after the market sensed that US rates are more likely to rise now than fall further.
The RBA also added to the positive sentiment with an optimistic assessment of easing risks from the US-China trade war and Brexit. Accordingly markets are pulling back from bets that the cash rate will drop to 0.5 per cent and the possible start of quantitative easing.
Interestingly, AUD has decoupled from commodity prices in 2019. The price of iron ore (Australia’s largest export) nears multi-year highs while AUD languishes.
Further RBA interest rate cuts this year are now a certainty, and that doesn’t bode well for currency valuations. Westpac has predicted three cuts this year.
Malaysia was added to a US watchlist of suspected currency manipulators in May. Though that means little right now in terms of economic implications, it added to negative sentiment, which then spurred a rise in USD/MYR to a 6-month high (MYR low) of RM4.2.
Among factors contributing to the ringgit’s weakness over the past year has been political uncertainty relating to Malaysia’s ruling Pakatan Harapan coalition, late-2018’s crash in oil prices, global trade tensions and higher US interest rates.
Why can't I just get the AUD/MYR market rate I see online or in the media?
The mid-rate is the rate you will see quoted online or the news. It is actually just the half-way point (hence mid-rate) between
the last rate at which the AUD / MYR was traded (bought or sold) in the international markets.
All foreign exchange providers charge a fee for providing their service and this fee is usually contained within the exchange rate margin (or difference to the mid-rate).
Some providers such as Transferwise will quote you the mid-rate (or close to) and charge a separate percentage fee.
Getting a good market rate is mainly about timing however the transaction margin
you end up being charged can be considerably reduced by around a few percent (of total amount being exchanged) for
travel money and possibly over 5% to 6% when sending money.
The exact potential savings depends on the currencies being exchanged and the amount you are transferring and if you are willing to shop around.
