Using Brunei Notes In Singapore: Is It Possible?

The Singapore-Brunei Currency Interchangeability Agreement (CIA) was established in 1967 to promote monetary cooperation between the two countries. Under the agreement, the currencies of both countries can be used in each other's country on par, without any extra charges. This means that one Singapore dollar gets one Brunei dollar and vice versa. However, it is worth noting that while banks in Singapore are obliged to exchange Brunei currency notes and coins at par and without charge, local businesses are not required to accept Brunei currency, although they are strongly encouraged to do so.

The Singapore-Brunei Currency Interchangeability Agreement

Under the agreement, the Brunei Darussalam Central Bank (BDCB) and the Monetary Authority of Singapore (MAS) accept each other's currency notes and coins and exchange them at par and without charge into their own currency. Banks in both countries also accept, from the public and businesses, currency issued by the other country at par and without charge.

The agreement is a reflection of the strong bilateral relationship between the two countries and has been mutually beneficial for both Singapore and Brunei. It has facilitated trade and investment between the two countries, with Singapore remaining one of Brunei's top 10 trading partners.

While the agreement is still in place, there have been reports of some merchants in Singapore not accepting Brunei currency. The MAS works with various organisations to remind their stakeholders, such as retailers and coffee shop owners, of the agreement and to accept Brunei currency as payment. Anyone who has had their Brunei currency rejected can report the matter to the MAS.

Brunei currency is legal tender in Singapore

The Brunei dollar is not legal tender in Singapore, but it is a "customary tender". This means that under the Currency Interchangeability Agreement (CIA) signed in 1967, Singapore and Brunei agreed to allow the currencies from both countries to be used for shopping in either place. The agreement was established to promote monetary cooperation between the two countries.

The deal allows the Singapore and Brunei dollars to be used in each other's country, at a one-to-one exchange rate, without any extra charges. Banks in both countries are obliged to exchange the other country's currency notes and coins at par and without charge. However, local businesses in Singapore are not obligated to accept Brunei currency, but they are widely encouraged to do so.

While the agreement has been mutually beneficial for both countries, some people in Singapore may not be aware of it and may be reluctant to accept Brunei currency. If you face any difficulty using Brunei currency in Singapore, you can report it to the Monetary Authority of Singapore (MAS).

Monetary cooperation between Brunei and Singapore

Singapore and Brunei have a strong monetary cooperation that goes back more than 50 years. The two countries have a Currency Interchangeability Agreement (CIA) that was established in 1967 to promote monetary cooperation between the two countries.

History

The foundation of the Singapore-Brunei friendship was laid by founding Prime Minister Lee Kuan Yew and the late Seri Begawan, who first met in 1960 in Brunei. They saw that both countries were facing similar challenges and had much in common. This led the two government leaders to begin cooperating in many fields, including economics, defence, and education.

In the early 20th century, the Board of Commissioners of Currency for the Straits Settlements (comprising Singapore, Penang, and Malacca) issued Straits Settlements currency notes. Brunei then had colonial and economic links with the Straits Settlements, and therefore the Straits dollar was also used in Brunei.

When Malaysia, Singapore, and Brunei gained independence, they began issuing three separate currencies on June 12, 1967: the Singapore dollar, the Malaysian dollar, and the Brunei dollar. Later on, these three countries signed Currency Interchangeability Agreements with each other. On May 8, 1973, the Malaysian government pulled out of the agreement with Singapore and subsequently with Brunei two weeks later.

The Currency Interchangeability Agreement (CIA)

Under the CIA, the Brunei Darussalam Central Bank (BDCB) and the Monetary Authority of Singapore (MAS) accept from banks the currency notes and coins issued by the other and exchange them at par and without charge into their own currency. Banks in both countries also accept for deposit, from the public and businesses, currency issued by the other country at par and without charge.

The CIA is supported by Singapore and Brunei's underlying economic fundamentals, such as their strong external balance positions, including their foreign reserve holdings, and has been compatible with macroeconomic stability in both countries.

Benefits of the CIA

The agreement has been mutually beneficial for both countries and has remained intact despite significant economic challenges faced by both countries over the years. It has also led to stronger trade and investment flows between the two countries. Trade between Singapore and Brunei, for example, has grown from under US$20 million in 1968 to US$822 million in 2016. Singapore's trade in services with Brunei has also risen from US$76 million in 2000 to US$400 million in 2015 and has expanded more rapidly than Singapore's trade in services with the world.

The agreement has also brought convenience to Bruneians visiting or seeking treatment in Singapore, as they do not need to exchange their currency.

Issues with the CIA

Despite the benefits of the CIA, there have been issues with its implementation. Some businesses in Singapore, particularly smaller family-owned businesses, are reluctant to accept Brunei currency as their customers will refuse to take it as change. There is also a lack of awareness about the agreement among the general public in Singapore, with some people refusing to accept Brunei currency even when they are aware of the agreement.

Reporting Issues

The MAS has stated that anyone who has had their Brunei currency rejected should refer the matter to them, providing details such as the name and address of the company, date and time of the incident, and what was said during the transaction. The MAS will then contact the retailer to educate them on the acceptance of Brunei currency in Singapore.

The monetary cooperation between Brunei and Singapore, as exemplified by the CIA, is a significant milestone in the bilateral relationship between the two countries. It has brought mutual benefits and strengthened trade and investment ties. However, there are still issues with the implementation of the agreement, particularly regarding awareness and acceptance among businesses and the general public in Singapore.

Singapore and Brunei's economic fundamentals

Singapore and Brunei have a strong economic relationship, with the Monetary Authority of Singapore (MAS) noting that their Currency Interchangeability Agreement (CIA) has been mutually beneficial for both countries. The MAS also highlighted that the agreement has been compatible with macroeconomic stability in both countries, supported by their underlying economic fundamentals.

Singapore and Brunei have similar economic challenges and have cooperated extensively in various fields, including economics, defence, finance, trade, investment, tourism, health, aquaculture, and education. Both countries have strong external balance positions, including substantial foreign reserve holdings, which have contributed to macroeconomic stability.

The agreement has facilitated stronger trade and investment flows between the two countries. Trade between Singapore and Brunei has grown significantly since the agreement was signed, with Singapore remaining one of Brunei's top 10 trading partners. Singapore's trade in services with Brunei has also expanded rapidly, increasing from US$76 million in 2000 to US$400 million in 2015.

In recent years, Singapore and Brunei have deepened their economic cooperation in new areas, including energy, the green economy, and food and medical supply resilience, by signing two Memoranda of Understanding (MOUs). This reflects their commitment to diversifying and strengthening their economic relationship further.

The two countries have also launched initiatives like the Reciprocal Green Lane, which facilitates essential business and official travel for residents, demonstrating their continued collaboration and mutual support.

The history of the Singapore-Brunei Currency Interchangeability Agreement

The Singapore-Brunei Currency Interchangeability Agreement (CIA) was established in 1967 to promote monetary cooperation between the two countries. The agreement allows the Singapore and Brunei dollars to be used in each other's country on par, without any extra charges.

The history of the CIA can be traced back to the late 19th century when the Board of Commissioners of Currency for the Straits Settlements (comprising Singapore, Penang, and Malacca) issued Straits Settlements currency notes. Brunei, which was a British protectorate at the time, also used the Straits dollar.

When Malaysia gained independence in 1957, it wanted to issue its own currency. Brunei, still under British rule, was also considering its own currency issuance arrangements. Singapore became independent on August 9, 1965, and initially wanted to share a common currency with Malaysia. However, despite multiple discussions, the two countries eventually decided to separate monetarily due to differences in maintaining a common currency.

On June 12, 1967, Singapore, Malaysia, and Brunei began issuing three separate currencies: the Singapore dollar, the Malaysian dollar, and the Brunei dollar. Subsequently, the three countries signed Currency Interchangeability Agreements with each other.

On May 8, 1973, the Malaysian government pulled out of the agreement with Singapore and, two weeks later, with Brunei. This decision was influenced by events that shook the international monetary system in the early 1970s, such as the United States' decision to devalue the US dollar against gold and the breakdown of the Bretton Woods system of fixed exchange rates.

Despite Malaysia's withdrawal, the Singapore-Brunei CIA has endured for over 50 years, surviving financial crises and structural changes in both economies. It reflects the strong bilateral relationship and financial cooperation between the two countries. To commemorate the 50th anniversary of the agreement in 2017, Singapore and Brunei jointly issued a set of two $50 commemorative polymer notes.

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