In 2007 Bank Negara announced the demonetisation of the RM500 and RM1,000 denomination currency notes, that these high value notes ceased to be legal tender effective from 1 July 1999. Needless to say, those with such unexplained (unaccountable) high value notes, who dared not return their crates of such notes to the authority for a refund, lost billions.
T'was said the volume of RM500 and RM1,000 notes in circulation before demonetisation stood at a combined value of RM5.52 billion.
India did the same thing in 2016 to its ₹500 and ₹1000 banknotes. The government's aim was to paralyse the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity and terrorism. But by a year's end, 99% of the banned currency had been deposited in banks proving the government's suspicion was wrong and its demonetisation a failure.
But alas, the sudden nature of the announcement and the prolonged cash shortages in the weeks that followed created significant disruption throughout the economy, threatening economic output and creating untold hardships for the poorer segment of society.
Today, Malaysiakini reported: Mahathir said his administration had the option of pegging the ringgit again or "changing currencies", but these options needs to be studied.
Mahathir had imposed currency controls in 1998 during the Asian Financial Crisis to peg the ringgit at RM3.80 to the US dollar. It was removed in July 2005 by the Abdullah Ahmad Badawi administration.
Currently, the ringgit is trading at RM4.023 to the US dollar.
On "changing currencies", Mahathir did not provide details but suggested that it was something that required detailed study.
"It's not an easy thing because when you want to replace currency, you must know how much currency is in circulation... because we have to replace what is in circulation and that is a very big amount.
"If you were to replace, you need to print huge amounts of paper money... but that is not a decision that one makes lightly. You have to study the effect on the economy," he said.
How will Mahathir's intent affect you? If you're a dedak makan-er like some of my blog visitors, wakakaka, don't accept very high value currency as they may turn into high value toilet paper, wakakaka.
I have half a dozen of these:
Wakakaka - enough for my char koay teow.