BANDAR SERI BEGAWAN
Friday, August 6, 2010
Brunei will maintain its agreement with Singapore on the interchangeability of their currencies.
The Ministry of Finance Brunei Darussalam in a press release yesterday said: “The Government of His Majesty The Sultan and Yang Di-Pertuan of Brunei Darussalam has no intention or plan to terminate the Currency Interchangeability Agreement between Brunei Darussalam and Singapore.”
The ministry issued the statement in reference to the report published by The Brunei Times on Wednesday, which discussed the scenario of the Sultanate de-pegging its currency from the Singapore dollar.
It “has worked very well for both Brunei Darussalam and Singapore”, the ministry said, referring to the agreement that has been in effect since June 12, 1967.
“Both countries continue to benefit in terms of currency stability and economic growth from the said arrangement,” the ministry said. “This has been acknowledged repeatedly by the International Monetary Fund (IMF) including in its Public Information Notice (PIN) no 10/71 issued recently on 3 June 2010 which states that ‘Directors agreed that the peg to the Singapore dollar serves Brunei Darussalam well’.”
It will be noted that agreement allows the two countries’ currencies to be exchanged at par, without charge, in each other’s country.
“Both currencies are freely convertible in the two countries. Through the years, the Agreement has brought about economic benefits and strengthened financial links for Brunei Darussalam and Singapore by facilitating bilateral trade, investments, and tourism,” Brunei’s Ministry of Finance and the Monetary Authority of Singapore said in a 2007 joint statement on the occasion of the 40th anniversary of the agreement.
They added: “The Currency Interchangeability Agreement has withstood the test of time and underpins the long-standing friendship and mutual trust between the two countries.”
In June of 2007, the two countries also launched the new $20 polymer notes, which they said reaffirmed to the public, retailers and financial institutions in both countries that Brunei and Singapore currency notes are treated on par.
The 1967 agreement was signed by the Brunei Currency Board (BCB) and the Board of Commissioners of Currency, Singapore (BCCS). The agreement continues to have full force and effect following BCCS’ merger with the Monetary Authority of Singapore in 2002, and after BCB was renamed Brunei Currency and Monetary Board (BCMB) in 2004.
Last month, the Sultanate announced the establishment of its Monetary Authority of Brunei Darussalam which will come into force next year.
The move has raised questions on the possibility of a de-pegging of the Brunei currency from the Singapore dollar.
In its statement yesterday, Brunei’s finance ministry said it was categorically stating that the government does not intend to terminate the agreement.
The Brunei Times
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