THE CASH USE OF THE MALAYSIAN RINGGIT: CAN IT BE MORE EFFICIENT?

Philip Hans Franses and Max Welz
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Max Welz: Econometric Institute, Erasmus School of Economics, POB 1738, NL3000 DR Rotterdam, The Netherlands

Annals of Financial Economics (AFE), 2020, vol. 15, issue 01, 1-5

Abstract: The current (as of 2012) denominational range of the Malaysian ringgit has banknotes of RM1, 5, 10, 20, 50 and 100, but no RM2. The previous range (1996) carried RM1, 2, 5, 10, 50 and 100, but no RM20. We compare the efficiency of these two ranges with a full range like the Euro has, that is, 1, 2, 5, 10, 20, 50 and 100. We estimate that if the Bank Negara Malaysia would reintroduce an RM2 banknote, the efficiency of the payment system in Malaysia would increase substantially.

Keywords: Cash payments; efficiency; denomination range (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1142/S2010495220500049

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