# Ringgit Peg Ended (July 2005)

URL: https://allhistories.com/malaysia/timeline/2005-ringgit-peg-ended
Location: Kuala Lumpur (Bank Negara Malaysia)
Themes: Maritime borders, Indonesia relations

In July 2005 the central bank abandoned the peg that had tied the ringgit to the United States dollar at 3.80, moving to a managed float against a basket of currencies. The decision ended seven years of a fixed rate introduced during the Asian financial crisis, and it followed a similar adjustment by China. The peg had been adopted in 1998 after the currency fell sharply from the roughly 2.50 per dollar of the mid-1990s. Authorities combined it with controls that made the ringgit non-tradeable outside Malaysia. By the mid-2000s the economy had recovered strongly, and a fixed rate no longer suited an expanding exporter. The ringgit gradually strengthened for several years after the change. It later weakened sharply in 2015 and 2016 amid falling oil prices and the political controversy over the state fund 1MDB, which showed how exposed a managed float remained to commodity cycles and investor confidence. At this point in the timeline (2005), Yang di-Pertuan Agong Sirajuddin of Perlis (13 December 2001 – 12 December 2006) was head of state of Malaysia, with Prime Minister Abdullah Ahmad Badawi (31 October 2003 – 3 April 2009) heading the government.

## Why it matters
It marked the formal end of the crisis-era capital control regime and returned the currency to a managed float.

Ruler at the Time: [Sirajuddin of Perlis](https://allhistories.com/malaysia/rulers/sirajuddin-of-perlis)

## Sources
- [Wikipedia — Malaysian ringgit](https://en.wikipedia.org/wiki/Malaysian_ringgit)
- [Wikipedia — Abdullah Ahmad Badawi](https://en.wikipedia.org/wiki/Abdullah_Ahmad_Badawi)