If you look at the remittances carried out between the United States and Malaysia, you will notice that a considerable amount of money moves in both directions. In 2016, around U.S. $60 million was sent to Malaysia from the U.S., and around U.S. $31 million was sent in the opposite direction. Bilateral trade of goods between both countries exceeded U.S. $50 billion in 2017.
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The dollar was adopted by the United States as its official currency in 1792. Now, the U.S. dollar is also used as sole currency in other places such as the Caribbean, Ecuador, El Salvador, the Federated States of Micronesia, the British Virgin Islands, two British Overseas Territories, as well as Turks and Caicos Islands. Some of the countries where it is used unofficially include Panama, Belize, Liberia, Myanmar, and Cambodia.
The U.S. dollar is the most commonly traded currency in the world. It accounted for 87.6% of the global forex market turnover in April 2016. It is estimated that in excess of U.S. $5 trillion is traded in the forex market each day. The U.S. dollar is also the world’s most preferred reserve currency.
|Nicknames||Buck, moolah, paper, dough, dead presidents, |
bones, greenback, green
|Bank notes||$1, $2, $5, $10, $20, $50, $100|
|Coins||1c, 5c, 10c, 25c, 50c, $1|
The Malaysian ringgit is the official currency of Malaysia. It is also used unofficially in the country’s bordering areas with Thailand, the Philippines, and Indonesia, as well as in some areas of Ho Chi Minh City, Vietnam.
Use of the Spanish silver dollar in Malaysia was replaced by the Indian rupee in 1837. However, the Spanish dollar was reintroduced after around three decades. Malaysia adopted the Straits dollar as its legal currency in 1903. Unofficially referred to as the Malaysian dollar, the ringgit was adopted as the country’s legal currency in 1967.
|Bank notes||RM1, RM5, RM10, RM20, RM50, |
|Coins||1, 5, 10, 20, 50 sen|
U.S. Dollar / Malaysia Ringgit Historical Rates
Upon its introduction in 1975, the value of the ringgit was pegged to the British pound. When the Malaysian dollar replaced the Malaya and British Borneo dollar in June 1967, both currencies were at par, valued at 8.57 dollars per British pound. Malaysia withdrew from the Interchangeability Agreement with Singapore and Brunei in May 1973.
The ringgit was traded as a free floating currency from 1995 to 1997, valued at around RM 2.50 against the U.S. dollar. However, the 1997 East Asian financial crisis resulted in the ringgit dropping to RM 3.80 against the U.S. dollar toward late 1997. In 1998, Bank Negara, Malaysia’s central bank, decided to peg the ringgit to the dollar at the rate of RM 3.80 = $1. Given the significant increase in capital outflow during the period, it was not possible to trade in the ringgit outside of the country.
The ringgit maintained its peg to the U.S. dollar until 2005, after which it became a floating currency again. This resulted in the ringgit gaining in value against the U.S. dollar, the Chinese renminbi, and the Hong Kong dollar. In April 2008, the ringgit traded at RM 3.16 against the U.S. dollar.
Falling prices of crude oil and the political uncertainty that surrounded the 2008 general elections in Malaysia resulted in a slight dip in the value of the ringgit. In September 2008, the ringgit traded at RM 3.43 against the U.S. dollar, and it got to RM 3.73 by March 2009. However, the ringgit managed to recover gradually, getting to RM 3 against the U.S. dollar by mid 2011, and hovering around RM 3.1 until 2014.
The ringgit lost value against the U.S. dollar a few times after 2014. This was because of the 1Malaysia Development Berhad (1MDB) scandal, the 2015-2016 Chinese stock market turbulence, as well as the results of the 2016 U.S. presidential elections. By early 2015, the ringgit traded at RM 3.7 against the U.S. dollar. In September 2015, the ringgit dropped to RM 4.43 against the U.S. dollar. While it stabilized at around RM 4.10 to RM 4.20 for some time after that, Trump’s victory caused it to breach the RM 4.50 mark briefly.
The drop in value of the ringgit in November 2016 prompted the central bank of Malaysia to implement several tough measures in order to rein in currency speculation. The ringgit slowly but surely appreciated against the U.S. dollar after that, until March 2018, when it began dropping in value again.
USD/MYR in the last five years
|U.S. $1 =|
|1 July, 2013||RM 3.2465|
|1 July, 2014||RM 3.1970|
|1 July, 2015||RM 3.8190|
|1 July, 2016||RM 4.0705|
|1 July, 2017||RM 4.2815|
USD/MYR in the last five months
|U.S. $1 =|
|1 March, 2018||RM 3.8636|
|1 April, 2018||RM 3.9215|
|1 May, 2018||RM 3.9800|
|1 June, 2018||RM 4.0395|
|1 July, 2018||RM 4.0600|
What Affects USD/MYR Rates?
Malaysia’s economy relies on the export of liquefied natural gas to a large degree. As a result, when the value of crude oil falls, the economy of Malaysia takes a hit, and this has an adverse effect on the value of the ringgit. This was plain to see when the price of crude oil dropped toward the end of 2014, with the ringgit dropping to a six-year low against the U.S. dollar at the same time.
Some of the other factors that tend to affect how the USD/MYR currency pair performs include geopolitical conditions, investor sentiment, as well as trade of both countries.
Carrying out a money transfer from the U.S. to Malaysia or the other way around requires that you pay close attention to the USD/MYR exchange rate, especially if you plan to transfer a large sum. Fortunately, comparing the top overseas money transfer companies gives you an easy way to make the most of your money.