by BERNAMA/ pic by TMR FILE
BANK Negara Malaysia (BNM) issued and circulated currency notes worth RM120.7 billion in 2019 compared with RM113.2 billion deposited by financial institutions in the same period, the Dewan Rakyat heard today.
Deputy Finance Minister II Mohd Shahar Abdullah said as of end-2019, currency notes in circulation stood at RM114.1 billion comprising notes worth RM110.5 billion, RM3.5 billion in coins and commemorative money valued at RM82.6 million.
“The rise in the use of currency in circulation is in line with economic growth. However, since 2012, the rate of increase has slowed due to wider acceptance of e-payment systems,” he said, noting that the currency in circulation grew again in 2019.
He was responding to a question from Pang Hok Liong (PH-Labis) during the oral question and answer session at the Dewan Rakyat today on the the total value of currency notes or bank notes issued and circulated by Bank Negara or in its records as of end-2019.
Mohd Shahar said although currency is still widely used in Malaysia, the ratio of currency in circulation to gross domestic product (GDP) is not high by world standards.
“At a ratio of 6.6 per cent, the use of currency in Malaysia is not as intensive as compared with several advanced countries like Japan (21.2 per cent), Switzerland (12.4 per cent) and Singapore (10 per cent).
“However, several other countries have a lower ratio than Malaysia such as South Korea (6.1 per cent), the United Kingdom (3.4 per cent) and Sweden (1.3 per cent),” he added.
To a supplementary question from Pang, Mohd Shahar said the annual cost of reprinting soiled notes is high at between RM250 million and RM340 million.
“We are constantly thinking of cost optimisation when ensuring the money we use in circulation is safe money,” he said when asked if the government plans to issue new currency notes.
Meanwhile, Mohd Shahar said the ratio of counterfeit bills to genuine notes in circulation is low at one to one million as of the first half of 2020, noting that the ringgit has between 10 and 15 security features.