Sing Dollar
"Singapore dollar
Legal Tender
From the information that the sites offered, I think that the joint currency is related more to the history that Singapore and Brunei shared, rather than a step towards a common market although they are reaping economic benefits such as increased tourism. It doesn't really seem as though they are working towards establishing a complete joint economy.
BUT I could be wrong(: so if anyone else knows about anything else, please post!"
- Jing yu
Legal Tender
From the information that the sites offered, I think that the joint currency is related more to the history that Singapore and Brunei shared, rather than a step towards a common market although they are reaping economic benefits such as increased tourism. It doesn't really seem as though they are working towards establishing a complete joint economy.
BUT I could be wrong(: so if anyone else knows about anything else, please post!"
- Jing yu
posted by ys at
7:40 AM
1 Comments:
The history that Singapore and Brunei shares:
The monetary union between Singapore, Malaysia and Brunei broke down only 2 years after Singapore's independence. A common currency with Brunei back then should have had many benefits for Singapore back then
1) Given that Singapore had just attained independence, she must be quite low in her foreign reserves to be able to defend a currency of her own from speculators. An inter exchangeable currency with Brunei will allow Singapore to tap into Brunei's foreign reserves
2) Brunei and Singapore's monetary objectives happen to coincide, as they are hosts to large pools of foreign workers(ie. that of economic growth and price stability). Given that Singapore pursues an active exchange rate policy, while Brunei plays a more passive role, there is little/no conflict of interests.
3) There is no loss of seigniorage(the money made from printing money at a lower cost than their monetary worth) as both countries can still issue their own currencies. **it's not a common currency, it's interchangeability of currencies
4) It has given Brunei a period of currency stability that is fairly unique for an oil-exporting country, given periods of high oil prices and that Brunei is a small country that could have been subject to rapid appreciation of her currency.
I suppose this price stability is especially important for Singapore and Brunei to attract foreign firms to come in and invest. The interchangeability also makes it convenient for businessmen in both countries to do business in the other
Of course, Singapore shouldn't face much problems regarding her foreign reserves today... it is even larger than her economy
By
ys, at 8:46 AM
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