It’s Merdeka week, which means there’s no better time to get to know more about our beloved country. And what part of Malaysia does RinggitPlus know best? Her money, of course.
In it’s relatively brief history as a currency, the ringgit has gone through quite a bit of evolution over the years and we bet there’s a fun fact or six about it that you probably haven’t even heard of...
Ringgit Means “Jagged”
Back in the Portuguese colonial era, the type of money widely circulated was the Spanish silver dollar. The craggy and irregular edges of the coin were the distinctive features of this currency, so the Malays of the time would refer to them as “the jagged ones” or “ringgit”. With ringgit being an old archaic word for “jagged”. Now that word is exclusively used to refer to the Malaysian currency.
We Sometimes Call it the Dollar Because it Used to be Called the Dollar
If you’ve ever heard someone describe the price of something as “10 dollars” when you know it’s 10 ringgit, you probably think they’re just making a translation mistake. While they might be wrong now, if they had said that before August 1975, they would be correct.
Because back in 1967, Malaysia, Brunei Darussalam, and Singapore began issuing their own currencies (all of them called the “dollar”) in place of the Malaya and British Borneo Dollar, which replaced the Malayan Dollar and Sarawak Dollar back in 1953, which replaced the Straits Dollar back in 1939, which replaced the original Spanish silver dollar back in 1898.
So with this new Malaysian Dollar, Bruneian Dollar, and Singapore Dollar, the three countries decided to sign a Currency Interchangeability Agreement to make their dollars exchangeable at par with each other. However, Malaysia pulled out of the agreement later on in 1973. Two years later, the official name of the Malaysian currency became Ringgit and Sen.
Despite this, the RM1 coin issued in 1989 still had the dollar sign ($) on it until 1993. Some changes take a while.
You Can Still Use the Old 1 sen Coin As Money
In 2008, a rounding mechanism was introduced where prices of the total bill of any purchase would be rounded to the nearest 5 sen, as a move to eliminate the 1 sen coin form circulation. By this time, the RM1 coin has also been demonetised for three years since we already have the RM1 banknote.
Despite this, if you have these coins in your purse or somewhere around the house, you can still use it as legal tender, but only for payments up to RM2. The seller would probably get annoyed and maybe even refuse to accept it though. So maybe it’s best to hold onto them or exchange them at Bank Negara’s offices.
The Banknotes Have Had a New Signature On it For a Year Now
If you take a look at the banknotes you have with you right now you can probably make out the signature of a Bank Negara Malaysia governor. If that signature is of a “Zeti Aziz”, that’s because she’s the former governor of Bank Negara, who served for 16 years. A term that’s only the 2nd longest after Tun Ismail Mohd Ali who served for 18 years from 1962 to 1980. Which is pretty impressive since the average tenure is just 5 years.
So since we have a new governor now, Datuk Muhammad bin Ibrahim, new banknotes issued from September 2016 will bear his signature. There is still very limited supply of those versions of banknotes at the time of writing, so not a lot of people are aware of this. In fact, the supply for these new notes is so limited, people are already selling them on ebay for a giant markup.
The State of Kelantan Wanted to Stop Using the Ringgit
Back in 2006, the Malaysian state of Kelantan made their own coins out of gold, stating it’s closer to the practice of the prophet Muhammad and that the current fiat currency has been compromised by usury and other unIslamic practices. These Kelantanese gold coins are called dinars and was implied by the state government that it should replace the use of ringgit in the state.
However, Kelantan’s own religious authority issued a statement saying they can’t use the dinars as legal tender as states don’t have the power to make their own currency. Right now you can still find people who hold on to these dinars since they’re made of gold and do have an actual value outside of its use as currency. Just don’t try to pay for ice-cream with them.
The New 50 Sen Coin Has a Cool Security Feature
The latest series of coins in circulation were issued back in 2012 and features gold-coloured 50 sen and 20 sen coins. What it also featured was a funky little security feature on it that you probably aren’t aware of. Tilting the coin on its reverse side shows a latent image of the number “50” and the word “sen”. Pretty cool since it’s often banknotes that get these extra security features and now we have it on our coins too.
As it turns out, the history of our currency can be as rich and as interesting as the history of our food, music, and culture. Who would have thought? So remember, the next time you pull out your banknotes and coins that you’re holding an essential piece of Malaysia right in the palm of your hands.