Explainer: Ringgit now among top 20 global currencies. So what?
Here's a simple breakdown.
1. More countries are using ringgit
Malaysia is conducting more trade with major partners like China, Indonesia and Singapore using ringgit instead of the US dollar. That means these countries are increasingly willing to accept and hold our currency, which is a sign of trust and confidence.
The more widely ringgit is used in international trade, the stronger and more visible it becomes on the global stage.
2. It can help strengthen the ringgit
As the ringgit is used more widely, demand for it increases, and higher demand typically helps support or strengthen its value.
This is good news for Malaysians, especially those who travel overseas, shop online from international sites, or buy imported goods. A stronger ringgit means better purchasing power abroad and the potential for more stable or even lower prices at home.
3. Malaysia looks good to investors
Foreign investors have been buying more Malaysian government bonds, drawn by improved public finances and competitive yields.
These investments are typically made in ringgit, which helps increase demand for the currency and shows that global investors see Malaysia as a credible, stable destination for their funds.
4. Confidence in our economy
Even if the ringgit's share of global transactions remains small, under 0.3 per cent, its inclusion in the top 20 signals that Malaysia is gaining ground as a reliable financial and trading partner in the region.
It's also a nod to Bank Negara Malaysia's efforts to modernise the financial system and promote digital payment infrastructure, making the ringgit more accessible for global use.
So, what's the catch?
Malaysia still has a long way to go before the ringgit becomes a major global currency. But landing in the top 20 is no small feat and it reflects growing recognition of Malaysia's strategic role in regional trade and finance.
Bottom line
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