Currency Interchangeability Agreement - Brunei Notes and Coins
In order to facilitate economic and trade relations, Brunei, Malaysia and Singapore adopted a system of free interchangeability of their respective currencies, which took effect from 12 June 1967. This tripartite arrangement was terminated in 1973 when Malaysia opted out of it. However, Brunei and Singapore decided to continue with the arrangement, which exists until today.
Under the agreement, each country undertakes to accept the currency issued by the other and to exchange them, at par and without charge, into their own currency. In other words, the two currencies are "customary tender" when circulating in the country in which they are not legal tender. Banks will thus accept from the general public, including retailers, Brunei currency at par for deposit. Hence, members of the public and businesses can safely accept Brunei currency received for payment.
Relevant extracts from the agreement are reproduced below:
The Brunei Currency Board1 will accept from banks in Brunei, notes and coins issued by the Board of Commissioners of Currency, Singapore, and will exchange such notes and coins, at par and without charge, into notes and coins issued by the Brunei Currency Board;
The Board of Commissioners of Currency, Singapore2, will accept from banks in Singapore, notes and coins issued by the Brunei Currency Board, and will exchange such notes and coins, at par and without charge, into notes and coins issued by the Board of Commissioners of Currency, Singapore;
The Board of Commissioners of Currency, Singapore, will inform all licensed banks in Singapore of the arrangements referred to in paragraph 2 above, and will request all banks to accept, at par and without charge, notes and coins issued by the Brunei Currency Board, and to exchange such notes and coins into notes and coins issued by the Board of Commissioners of Currency, Singapore."
The agreement between Brunei and Singapore can be viewed as a currency union between two countries characterised by a one-for-one exchange rate of their currencies and a joint (but managed) float against all other currencies. There are economic gains beyond the political and administrative factors that had resulted in this arrangement. First, the two currencies serve better as a medium of exchange, as they can be used for direct payment in the trade and investment between the two countries, thereby reducing conversion costs. Second, the two currencies serve better as a store of value by eliminating exchange-rate fluctuations. Thus, the arrangement is conducive to the attainment of allocative efficiency and integration of the two economies.
40th Anniversary $20 Polymer Portrait Note
Singapore and Brunei Darussalam1 celebrated the 40th Anniversary of the Currency Interchangeability Agreement on 27 June 2007. The $20 polymer commemorative notes were launched in a ceremony held in Bandar Seri Begawan, Brunei, by Prime Minister Lee Hsien Loong and His Majesty Sultan Hassanal Bolkiah Mu’izzaddin Waddaulah, The Sultan and Yang Di-Pertuan of Brunei Darussalam.
Three million Singapore $20 polymer notes were introduced into circulation through the banks. This one-time only issue also has a limited edition note set which contains a special folder consisting of two notes - one Singapore $20 (with a special over-print of the two countries’ state crests and text “40th Anniversary Currency Interchangeability Agreement”), and one Brunei $20 (with special over-print of the text “40th Anniversary Currency Interchangeability Agreement”). The two notes, with matching serial numbers, add up to a total face value of “$40”, marking the 40th Anniversary of the Agreement.
Singapore $20 Note Design
The note is predominantly orange in colour and measures 149mm by 72mm (which is between the size of the $10 and $50 notes).
The main design features on the front of the note are:-
Portrait of Singapore’s first President, the late Encik Yusof bin Ishak, and the text “Yusof bin Ishak, First President of Singapore” below it. As with the $10, $5 and $2 polymer notes, MAS has continued with the portrait series for the $20 polymer notes as the public is familiar with the series.
The main design features on the back of the note are:-
The note includes security features unique to polymer technology, which are similarly found in the $2, $5 and $10 polymer notes. They are:
1. The Brunei Currency and Monetary Order 2004 took effect on 1 February 2004. With the introduction of this Order, the Brunei Currency Board was renamed as Brunei Currency and Monetary Board (BCMB). The Autoriti Monetari Brunei Darussalam Order 2010 took effect on 1 January 2011. With the introduction of this Order, the Brunei Currency and Monetary Board was renamed as Authoriti Monetari Brunei Darussalam (AMBD).
2. The Board of Commissioners of Currency, Singapore was dissolved on 1 Oct 2002 and its functions, property and liabilities had been transferred to the Monetary Authority of Singapore (MAS) under the Currency (Amendment) Act 2002.