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.

Cash payments, denomination range, efficiency
Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems (jel E42), Central Banks and Their Policies (jel E58),
Annals of Financial Economics
Department of Econometrics

Franses, Ph.H.B.F, & Welz, M. (2020). The Cash Use of the Malaysian Ringgit. Annals of Financial Economics. doi:10.1142/S2010495220500049