TL;DR

But happy4ever have probably the best explanation. Currency is just a way to store value. BNM is the monetary authority in Malaysia. So basically BNM create a finite amount of money, and put it into the system. BNM will keep some foreign currency & gold as reserves.

In reality what happens is just BNM will go to the FX market and buy some USD from banks, and then credit the bank's account (in BNM) with some MYR. The USD becomes our reserve. That MYR is really just a number (eg system says bank X have 100Mil in BNM.). If bank need hard cash they can ask from BNM (known as "currency in circulation"). This is what people say as "print money". It happens more often than you think, but BNM must control when to print and when to "destroy" (i.e. use USD to buy MYR back). If not our currency will be worthless.

So what happens right now is a series of chain event. When US decided to "print money" in 2008 (basically the Feds create USD to buy bond), people see USD will devalue, and move them to emerging market like Malaysia. So they sell USD and buy MYR. MYR value rises. Right now 2015, USD increases in interest rate, which means it's more attractive to hold USD. They then reverse the transaction. Plus oil price slump, plus 1mdb, end up everyone sell MYR to keep other currency. In order to handle such large transaction, BNM have to use their reserve to be the one "buying MYR and selling USD". But with limited reserve we can't keep holding USDMYR = 3.2000. That's why it slides..... rather drastically.