Brunei, Singapore strengthening financial links with CIA

(Borneo Bulletin) – Brunei Darussalam and Singapore on June 27, celebrated the 40th anniversary of the Currency Interchangeability Agreement (CIA).

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Exchanging of the new $20 notes between His Majesty and Mr Lee Hsien Loong

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His Majesty, HRH the Crown Prince and HRH Prince Mohamed Bolkiah with Mr Lee Hsien Loong looking at the new $20 notes

Marking this auspicious occasion, His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam and Mr Lee Hsien Loong, Prime Minister of Singapore, jointly launched the new $20 polymer notes issued by the two countries in a ceremony held at Istana Nurul Iman.

Also present at the launching ceremony were His Royal Highness Prince Hj Al-Muhtadee Billah, the Crown Prince and Senior Minister at the Prime Minister's Office, His Royal Highness Prince Mohamed Bolkiah, Minister of Foreign Affairs and Trade, and Her Royal Highness Princess Hjh Masna, Ambassador at large at the Ministry of Foreign Affairs and Trade.

The CIA took effect on June 12, 1967 and was signed by 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 Sinagpore (MAS) in 2002, and after BCB was renamed Brunei Currency and Monetary Board (BSMB) in 2004.

The agreement allows the Brunei Dollar and Singapore Dollar to be exchanged at par, without charge, in both countries. 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 and Singapore by facilitating bilateral trade, investments and tourism.

It has withstood the test of time and underpins the long-standing friendship and mutual trust between the two countries.

The launch of the new $20 polymer notes reaffirms to the public, retailers and financial institutions in both countries that Brunei and Singapore currency notes are treated on par.

Both countries have issued commemorative notes, which were sold in a set comprising a $20 polymer note of each country. Each set consisted of one piece of B$20 and one piece of S$20 with matching serial numbers, adding up to a total face value of $40 signifying the 40th anniversary. The circulation of $20 banknotes have also been issued by both countries.

During the launching ceremony, His Majesty delivered a titah where he said that this was much more than the routine launching of a new banknote.

"Firstly, we are celebrating what the banknote means; a stable currency and stable prices and employment. Vital investment, trade and strong combine financial reserves enable us to resist speculation and the damaging costs that this can have on our economies.

"And secondly, we are celebrating what the banknote offers to our people and our governments, the chance to pursue our national objectives in peace and stability," His Majesty said.

"Like our friends in Singapore, we see that as being the bedrock upon which successful modern nations are built. In Brunei, it is that which gives our people confidence in the future. In terms of currency, it is an instinctive confidence that is reinforced in this new bank note.

"On one side, it shows us as sovereign nations. On the other, it shows us as very closely linked in a crucial aspect of modern life. That clearly sums up our countries' relationship," the monarch added.

Prime Minister Mr Lee Hsien Loong also delivered a speech and highlighted: "The benefits of the CIA are evident in the healthy growth and trade between our two countries. On the investment front, both sides have invested in fast growing niche areas such as hospitality and medical fields."

He also mentioned that the agreement has also been a boon in tourism between our two countries because it has made it much more convenient for tourists to pay in their own currency.

"In 2005, the total bilateral flow of Brunei and Singapore currencies was more than $645 million," the prime minister added.

The 40th anniversary event and the launch of the special commemorative notes mark a significant milestone in our bilateral relations, he said.

His Majesty and the prime minister then exchanged the new $20 Brunei and Singapore notes after the new $20 notes were officially launched.

In another issue related to the Currency Interchangeability Agreement (CIA), during Singapore Senior Minister Goh Chok Tong's visit to Brunei earlier this year, he mentioned that there are a lot of retailers in Singapore who are unaware of the interchangeable agreement with Brunei, and that the Brunei currency must be accepted in Singapore.

In question to this, Monetary Authority of Singapore (MAS) shared with the Bulletin on June 26, the actions they will take to create awareness among the Singapore public.

Firstly, MAS works closely with the Singapore Tourism Board to assure retailers on the acceptance of Brunei currency. Letters reminding retailers on the acceptance of Brunei currency are sent to various retail associations regularly, and they are very supportive of our efforts. The associations would in turn communicate the same message of assurance to their members, who collectively make up the majority of all retail-related shops in the industry.

Secondly, the MAS web site has a link to the Brunei Currency and Monetary Board (BCMB) for members of the public and businesses to familiarise themselves with the look of the Brunei currency.

And lastly, MAS has distributed posters on Brunei's currency notes to the various retailers in Singapore to keep them abreast of the latest currency designs.

According to MAS, the CIA was signed 40 years ago by Dato John Lee, then Chairman of Brunei Currency Board, and by Mr Lim Kim San, then Chairman of the Board of Commissioners of Currency, Singapore. Apparently, there was no official signing ceremony for the CIA, which was done through an exchange of letters, according to a MAS spokesperson.

Why did the two countries decide to have such an agreement, the Bulletin asked? MAS replied: "The CIA between Brunei and Singapore was signed with the objective of maintaining continuity and promoting closer cooperation in monetary matters after the issuance of separate currencies by both countries."