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Singapore’s local currency, the Singapore Dollar, has been one of the most resilient in Asia over the past few decades. It has steadily strengthened due to consistent, robust economic growth and capital inflows. In Southeast Asia, one of Singapore’s neighbours is the nation of Brunei, located on the northern coast of Borneo. Brunei is well known for its monarchy and its close economic and trade ties with Singapore. Many may not realise that the Singapore and Brunei Dollar can be used interchangeably in both countries. This means one Singapore Dollar is worth one Brunei Dollar, and vice versa. Banks in both countries accept deposits in either currency, and businesses must also accept both currencies. But how did this interoperability of the two currencies come about? In June 1967, Malaysia, Singapore and Brunei Darussalam (Brunei’s official name) began issuing their own respective currencies, replacing the Malaya and British Borneo dollars previously used. These new currencies—the Malaysian Dollar, the Singapore Dollar, and the Brunei Dollar—were all pegged at a 1-to-1 ratio linked to the pound sterling (GBP). This linkage was intended to avoid disruption during the transition to the new currencies. The three countries established the Currency Interchangeability Agreement (CIA) during this period. This agreement ensured that each country would accept the other two countries’ currencies at par and without charge. Each country signed separate agreements with the other two within the CIA framework. The CIA faced its first major test later in 1967 when Britain devalued the pound. Malaysia, Singapore, and Brunei chose not to follow this devaluation, thereby maintaining the stability and interchangeability of their currencies. This means that the three currencies choose to delink themselves from the GBP. While the Singapore-Brunei Currency Interchangeability Agreement (CIA) remains intact today, Malaysia exited the agreement in the 1970s during the US Dollar’s devaluation against the Gold Standard. In 1971, President Nixon devalued the US Dollar against gold, triggering a revaluation of all global currencies relative to the dollar. This led to the collapse of the post-war Bretton Woods system of fixed exchange rates, as major currencies abandoned the Gold Standard and began floating against the US Dollar. Amid this uncertain and volatile macroeconomic environment, the Malaysian government terminated its currency agreements with both Singapore and Brunei in May 1973. That same year, Singapore adopted a managed floating system where the Singapore dollar was matched to a basket of foreign currencies of its major trading partners Following the signing of the original 1967 agreement, the Singapore Dollar and Brunei Dollar were issued by the newly-created bodies of the Board of Commissioners of Currency, Singapore (BCCS) and Brunei Currency Board (BCB) respectively. In Singapore, the Monetary Authority of Singapore (MAS) was created in 1971 but in both countries the BCCS and BCB were technically independent from the central bank. According to an International Monetary Fund (IMF) mission to Singapore in 1971, it was noted that: All this helped boost the credibility of the Singapore dollar – and, by default, the Brunei dollar – as it highlighted the fact that the central bank could not gratuitously print money to finance government deficits. That credibility remains, even though the BCCS was merged into the MAS in 2002. Likewise, the BCB has evolved and is now Brunei’s central banking authority; Autoriti Monetari Brunei Darussalam (AMBD). Not everyone is aware that the Singapore Dollar and Brunei Dollar are interchangeable, even though the Singapore-Brunei Currency Interchangeability Agreement is now in its 58th year of existence. It’s worth noting that had Malaysia not exited the currency agreement, the Malaysian Ringgit would also be pegged against both the Singapore Dollar (SGD) and the Brunei Dollar (BND). A ceremony was held in July 2016 to commemorate the 50 anniversary of the agreement, which was attended by Sultan Haji Hassanal Bolkiah, Sultan and Yang Di-Pertuan of Brunei Darussalam, and Mr Lee Hsien Loong, Singapore’s Prime Minister. The two countries also jointly launched two commemorative $50 notes to mark the occasion. The MAS noted in 2016 that the two countries’ currencies have survived multiple crises and events, such as the 1997 Asian Financial Crisis. The current agreement is the only one of its kind in Asia, and given the close economic links between Singapore and Brunei, it could last another 50 years or longer.