The Currency

On Sept. 1, 1998, the Malaysian government effectively pulled the ringgit (RM) off international markets and implemented exchange controls in an attempt to ward off speculative pressure and provide stability. The value of the currency was eventually pegged to the U.S. dollar at RM3.80=US$1.

The result: Malaysians can't take more than RM1,000 out of the country, unless it can be proved that they need the money, such as in the case of foreign studies. Malaysians also were given a month to bring back to Malaysia ringgit accounts outside the country. Bills for exports and imports have to be settled in foreign currencies, not in ringgit. RM1,000 and RM500 notes were also taken out of circulation.

In announcing the measures, which were harshly criticized by the International Monetary Fund, Malaysian Prime Minister. Mahathir Mohamad defended them as being in the best interest of the country. "We have to resort to whatever methods we ourselves can take," he said. "And what we can do on our own is to take care of our own currency."

The issue of currency controls brought out into the open the political differences of Mahathir and his then deputy prime minister Anwar Ibrahim, who was a well-known advocate of a free market and against any form of intervention. A day after the capital controls were announced, Anwar was sacked. He was eventually arrested and found guilty of corruption charges.

Should you need to carry ringgit notes, foreign currency and travellers checks in excess of permitted limits, prior written permission may be obtained from the head of the Exchange Control Department of the Bank Negara Malaysia.

The Basics
The unit of currency is the Malaysian ringgit (RM), which is divided into 100 sen. It comes in RM1, 5, 10, 20, 50 and 100 notes. There are no RM500 or RM1000 notes, both of which were withdrawn in 1998 and ceased to be legal tender in July 1999. Bank Negara reintroduced the RM1 banknote into circulation in November 2000, the sixth and last denomination to be issued in the current local currency note series. With the reissuance of the RM1 note, RM2 notes will be gradually withdrawn from circulation (although the RM1 coins will still be accepted).