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Ringgit, The Non-Tradable Currency

Ringgit Is Traded In Kathmandu

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It is unexpected and unusual to know that, in Kathmandu, Ringgit is accepted for trade against the Nepalese Rupee by the licensed money changers. The Ringgit is standing side-by-side with currencies from other countries and having its exchange rates exhibited on the currency boards of the licensed money changers.

Since 1998 and after the announcement made by the Bank Negara to peg the Ringgit against US Dollar at RM3.80, and following that year’s East Asian financial crisis, the Ringgit was made a non-tradable currency outside Malaysia.

When Bank Negara announced the end of the peg to the US Dollar in 2005, the rule to abstain the Ringgit from being traded outside Malaysia had not been relaxed and remain unchanged.

It simply means, foreign banks and money changers will not change the Ringgit to any destination currency of any countries even when there is a demand. When a currency is labeled as a non-tradable currency, logically you can’t spend the currency in any country other than the issuance country. In other words, the currency would not be accepted and it will be rejected if you try to spend them elsewhere overseas.

I went to Nepal with Zul in the summer of 2014. It was my first trip to Nepal. Several days before my departure to Nepal, I withdrew some money from the ATM machine and I exchanged them with the currency trader for US Dollars. In my backpacking money pouch, I only kept several pieces of banknotes in Ringgit that made up a sum of less than RM100. I did not carry any extra Ringgit in the money pouch.

I thought to myself, “There is no need to withdraw extra cash from the ATM machine, after all, the Ringgit will not be accepted in Nepal”.

I was wrong.

When I was in Kathmandu, I only realised the Ringgit was widely traded in Nepal. The Nepalis have a vast initiative to collect the Ringgit as a major source of foreign currency they earned in Malaysia. Many Nepalis look up to Malaysia as a popular destination for work. As they earn the Ringgit, they send the money home. The Ringgit may not be traded in countries outside Malaysia, but in Nepal, the Ringgit is a vast traded currency among themselves. There is always a black market for Ringgit in Nepal. Many of them have their earned Ringgit exchanged to the Nepalese Rupees in the black market with the black market traders.

There is a demand for Ringgit in Nepal. I choose to bring Ringgit in my money pouch now instead of US Dollars, and I may save some conversion commission. I’ll retain only a few pieces of US Dollars in the money pouch. Sometimes, the US Dollars are made a compulsory currency, so peculiar that we are being insisted to make a payment with the dollars. Otherwise, the Ringgit will be my primary banknotes carrying with me in this coming trip to Nepal.

Before I left for the trip to Nepal in 2014, I tried to find a money changer at Jalan Masjid India to exchange the Ringgit I withdrew from the ATM machine. I wanted to buy some Nepalese Rupees. Jalan Masjid India is the area one can find many money changers along the street. There is a vast choice for selection at Jalan Masjid India.

I hopped into many money changer booths but very few offered to sell Nepalese Rupees. Nepalese Rupees were almost not traded here due to lack of demand. I managed to find one money changer, but I was offered a cheap rate. He offered to me - RM1 to NR21. It was not a proper rate to close a deal. In Kathmandu, for an outright exchange of Nepalese Rupee from Ringgit, they sold their rupees for a favourable rate, as high as NR28 or NR29. There was a vast difference in the offered rate if I buy Nepalese Rupees in Kathmandu.

In Kathmandu, Zul purchased a sum of Nepalese Rupees by selling off the Ringgit he held in hands. He had the advantage to negotiate for a better exchange rate than the rate already offered to him. Zul negotiated with the money changer and the money changer compromised to offer him NR30 for each Ringgit he was selling. Zul was given the rate he insisted.

Never underestimate the essence to negotiate when we trade a currency. A hike in the rate, as lean as RM0.005 does make a difference in the total amount of money we carry home from the currency trader. We have to negotiate with the trader if we purchase a bigger sum of currency from them.

I have an amount of nearly NR13,000 retained in my money belt left over from the last trip. I keep the rupees because I know I will make a trip to Nepal in another time.
Yeuta Manchhe Ko Maya Le Kati - by Narayan Gopal

Posted by Quah Khian Hu 06:41 Archived in Malaysia

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