The ringgit is the official currency of Malaysia. This decimal currency has a hundredth subdivision called the sen. The name of the currency derives from the Malay word for jagged, which began to be used in the 16th century to describe Spanish dollars with serrated edges. The ringgit and sen were originally named the dollar and cent in English, but in 1975, the names were standardised for all languages. In parts of the country, however, many people still refer to the currency in dollars and cents. In addition, the original symbol was the dollar sign, sometimes preceded by an M, but this was replaced in 1993 by RM. The ringgit was introduced in 1967 by the newly formed central bank, Bank Negara Malaysia.
The country of Malaysia was formed in 1963 when rebels in Malaya and nearby British colonies united into a single force. The ringgit was introduced four years later to replace the Malaya and British Borneo dollar, which had been used since 1957. At introduction, the value of the ringgit was on par with the Malaya and British Borneo dollar at 8.57 ringgits: 1 pound sterling. Although Singapore and Brunei eventually broke away from Malaysia, the Singapore dollar and Brunei dollar remain interchangeable with the Malaysian ringgit. The ringgit was pegged to the U.S. dollar in 1998 until it was floated in 2005.
Bank Negara Malaysia was first established in 1959 as Bank Negara Malaya. The bank’s duties included issuing currency and acting as a banker to the government. Its duties expanded in 2009, but Bank Negara Malaysia remains wholly owned by the government and reports to the Ministry of Finance.
Industrialisation and the creation of an open economy are relatively recent events in Malaysia, and most industries remain state-oriented. However, the GDP has been rising steadily at an average annual rate of 6.5 percent since 1957, and Malaysia now has the third-largest economy in Southeast Asia. In the 1950s through the 1970s, when the economy of the country first began to grow, it was largely based on mining and agriculture. Since then, the economy has diversified, and industry has become the dominant sector. Recently, tourism has also become important to the Malaysian economy. Additionally the government has pushed for more development in the electronics industry, and Malaysia is now one of the largest exporters of semiconductors and semiconductor devices in the world.