Currency Interchangeability Agreement


Currency Interchangeability Agreement

On 12 June 1967, the Currency Interchangeability Agreement (CIA) took effect between Brunei Darussalam and Singapore. The CIA aimed to facilitate improved economic and trade relations between the parties, and is a key area of economic cooperation between Brunei Darussalam and Singapore. Malaysia was originally a party to the CIA in 1967 but subsequently left the arrangement in 1973. Brunei Darussalam and Singapore continued to maintain the CIA until today.

Under the CIA, the monetary authorities and licensed banks in both countries will accept the currency issued by the other country and exchange it, at par and without charge, into their domestic currency. With this in place, the two currencies are "customary tender" circulating alongside with the domestic currency in the other country.  In other words, Brunei currency may be accepted for payment of goods and services in Singapore, and vice-versa for the use of Singapore currency in Brunei Darussalam.

Relevant extracts from the 1967 CIA that facilitate the currencies acceptance are reproduced below:

"2(a)(i)The Brunei Currency Board1 will accept from banks in Brunei, notes and coins issued by the Board of Commissioners of Currency, Singapore2, and will exchange such notes and coins, at par and without charge, into notes and coins issued by the Brunei Currency Board;
2(b)(i)The Board of Commissioners of Currency, Singapore, 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;
3(a) The Brunei Currency Board, will inform all licensed banks in Brunei 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 Board of Commissioners of Currency, Singapore, and to exchange such notes and coins into notes and coins issued by the Brunei Currency Board."

Footnotes:

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 Autoriti 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.