In its Annual Report 2019, the central bank said there are several notable provisions in the Currency Act 2020 such as an economic-wide cash transaction limit can be set to prohibit large value cash transactions and a legal tender limit for coins is set at 25 pieces.
“Recipients may refuse to accept payment if it is made using more than 25 pieces of coins of any denominations. No one is allowed to melt coins with the intention to gain profit,” said the central bank.
The central bank, financial institutions and registered currency processors are empowered to seize currency that is suspected to be fake.
BNM said physical currency continues to be widely used in the Malaysian economy, with approximately RM114.1 billion in banknotes and coins in circulation at end-2019.
In 2019, currency in circulation (CIC) grew by 3.6 per cent, markedly lower than the five-year average of 7.9 per cent.
“Our currency operations are also directed at ensuring the high quality of CIC so that the public has confidence in our currency. This involves the central bank removing worn and defective banknotes from circulation and replacing them with either new or fit banknotes,” said BNM.
It added that the central bank also acts to safeguard the integrity of the ringgit against counterfeit or fake banknotes and coins.
“In managing our currency operations, we strive to keep our cost of operations low. We do this by prioritising the distribution of fit bank noted as it substantially costs less to process used banknotes than to produce new ones,” said BNM.