KUALA LUMPUR (Sept 5):The money changing business in Malaysia, which recorded a turnover of RM73.5 billion in 2016, is expected to grow close to 9% this year to hit RM80 billion, according to the Malaysian Association of Money Services Business (MAMSB).

MAMSB president Ramasamy K Veeran said the growth in the money changing business will be driven by the influx of tourist arrivals in the country.

"Many tourists are still coming into Malaysia judging by the flight arrivals, also there is a high turnover in the money changing business from Malaysians who work in Singapore and Brunei, who convert their [higher denomination] currencies here," he told reporters at a news conference in conjunction with the Money Services Business Asia Pacific Conference 2017 today.

Ramasamy said the wholesale currency business, which recorded transactions totalling RM10.6 billion in 2016, is also expected to grow by approximately 40%.

However, he noted that remittances are expected to drop by about 7% this year. Total transaction value of remittances had dropped 1.9% to RM34.4 billion in 2016, compared to RM34.9 billion in 2015.

"We see the value of remittances continuing to drop this year, because of currency [fluctuations], for example Nepali workers three years ago would be sending home money when one ringgit equalled to 28 rupees, today they will be sending one ringgit to 23.8 rupees.

"So they tend to hold back [before remitting money home] in hope of the [ringgit strengthening], so that's the challenge that we are facing today," he said.

According to Bank Negara Malaysia's Financial Stability and Payment Systems Report 2016, the total amount of Money Services Business (MSB) transactions in Malaysia, consisting of money changing, wholesale currency and remittance totalled RM118.5 billion in 2016, up 14.7% compared to RM103.3 billion in 2015.

MAMSB is the national association for MSB companies in Malaysia which have been granted licences under the Money Services Business Act 2011 (MSBA), as well as enterprises that have been approved as MSB agents to principal licensees under MSBA.

The association has 551 members, consisting of licensees under MSBA and MSB agents.