Note to Singaporeans: Brunei currency still legal tender here
SINGAPORE — Bruneians have no trouble walking into any shop in Orchard Road and paying for their iPads or Louis Vuitton bags with a wad of Brunei currency notes — no questions asked. This is the perk of a currency interchangeability agreement inked between Singapore and Brunei 50 years ago.
The deal allows the Singapore and Brunei dollars to be used in each other’s country on par, without any extra charges. The currency would be repatriated; in the past three years, the Monetary Authority of Singapore (MAS) told TODAY, it sent some B$1.3 billion annually to its counterpart, Autoriti Monetari Brunei Darussalam.
Beyond the Republic’s shopping belt, however, Bruneians say most Singaporeans seem to have forgotten about the agreement, and tell of their frustration of holding cash that nobody will accept.
Five out of 10 times that Bruneian magazine editor Redzwan Kamarudin hails a taxi here, he will encounter a cabby who refuses to accept his Brunei notes. The 26-year-old’s worst encounter — a cabby shooing him out of the taxi once the former found out he had no local currency.
Mr Redzwan said: “Sometimes it makes me wonder, do we even have our currencies pegged, since so many places don’t tend to accept it any more … At the shops, they either don’t accept it at all or they’re very wary and have to check with their manager.”
One of the reasons cashier Ricky Loo, 70, who works at a chicken rice stall, is reluctant to accept the currency is because his customers will refuse to take it as change. He said: “Over time, we also don’t really want to receive multiple B$5 or B$10 notes. One B$100 note is still okay when our customers don’t have any other currency with them.”
Most ordinary Singaporeans, it seems, may have forgotten about the long history of this currency agreement.
Following a colonial-era practice that saw currencies of all three ex-British colonies — Malaysia being the third — interchangeable on par, the first formal agreement, involving Malaysia, was inked on June 12, 1967. It was a sign of the depth of economic links between the three countries, despite the move to issue their own national currencies post-independence.
Malaysia opted out in 1973, given its domestic development imperatives, but Singapore and Brunei soldiered on for five decades, weathering economic challenges such as the 1997 Asian financial crisis and the global financial crisis, and significant structural changes to both countries’ economies, domestic monetary institutions and arrangements.
The agreement was able to withstand the test of time as the exchange rate-centred monetary policies of both these small and open economics kept inflation well in check; bilateral trade and investment also grew progressively, aided by low transaction costs from the fixed exchange rate.
Thus banks here accept from the general public Brunei currency — coins included — at par for deposit, said the MAS on its website.
The authority also works with the Singapore Tourism Board, National Environment Agency, Housing and Development Board, and relevant trade and business associations every year to remind their stakeholders — including hawkers, retailers and coffee shop owners — of the currency interchangeability agreement.
Anyone who has had their Brunei currency rejected should refer the matter to the MAS, a spokesman said.
Details such as name and address of the company, date and time of incident, and what was said during the transaction should be included.
The agreement has brought convenience to Bruneians such as Haji Hamdan. The 47-year-old has been in Singapore for the past four months to seek treatment for his 13-year-old daughter, who suffers from bone cancer.
Mr Haji, who receives B$30 a day as allowance, did not have to go to the money changer once. But for locals familiar with the currency, Brunei’s currency is not seen as often as before.
Mr Guy Kang, who has owned a camera shop at Far East Plaza for 22 years, used to receive up to B$20,000 a month from tourists, and nowadays, he hardly has more than B$1,000 in his cash register.
The currency agreement, however, will not come to an end any time soon, said CIMB economist Song Seng Wun.
It helps to provide predictability and stability for a “more volatile”, oil-rich Brunei, so the day Singapore enters “a huge crisis of confidence” and the Bruneians “start believing that Singapore currency isn’t worth it any more” is when it will end, he said.
In the meantime, some Bruneians like to hoard Singapore currency because when they travel abroad, the Singapore dollar fetches a slightly better exchange rate than the “fairly unknown” Brunei dollar, said Bruneian businessman Fred Mustafa Abdullah Kho, 58.
CORRECTION: In an earlier version of this article, we said the sum repatriated annually in the past three years is B$1.3 million. That is incorrect. It should be B$1.3 billion. We are sorry for the error.