Introduction to the Singapore Dollar (SGD)
The Singapore Dollar (SGD) is the official currency of Singapore, with the currency code S$. As Singapore's legal tender, it circulates not only within the country but also in Brunei under a reciprocal currency agreement. The SGD comes in both **coins and banknotes**, with polymer (plastic) notes introduced in 2004 for denominations like S$2, S$5, and S$10.
Historical Evolution of the Singapore Dollar
Pre-Independence Currency Systems
- 1845–1939: Used the Straits Settlements "Straits Dollar" (叻币).
- 1940–1965: Adopted the Malayan dollar, later the Malaysian and British Borneo dollar.
- WWII Era: Japanese military scrip circulated during occupation.
- Post-War: Reverted to the Malayan dollar until Singapore’s independence.
Post-Independence Monetary Milestones
- 1965: Singapore separated from Malaysia, initially retaining the Malaysian currency.
- 1967: Launched its own currency, the Singapore Dollar, issuing four series of banknotes.
- 1973–1985: Pegged SGD to a basket of currencies.
- 1985 Onward: Shifted to a managed float exchange rate.
Key Features of SGD Banknotes and Coins
Current Denominations in Circulation
| Type | Denominations |
|---|---|
| Banknotes | S$2, S$5, S$10, S$50, S$100, S$1,000, S$10,000 (Higher denominations rare for public use) |
| Coins | 1¢ (discontinued but valid), 5¢, 10¢, 20¢, 50¢, S$1 |
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Governance and Issuance of the SGD
- 1967–2002: Issued by the Singapore Currency Board.
- 2002–Present: Managed by the Monetary Authority of Singapore (MAS).
The MAS ensures stability through policies like the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) to curb inflation and promote economic growth.
SGD in International Context
- Brunei-Singapore Currency Interchangeability Agreement: Allows 1:1 exchange between SGD and Brunei dollar.
- Global Standing: SGD is among the top 15 most traded currencies worldwide, known for its stability and strong backing by Singapore’s reserves.
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FAQs About the Singapore Dollar
1. Is Singapore Dollar (SGD) accepted outside Singapore?
Yes, SGD is freely accepted in Brunei and can be exchanged in most international banks.
2. Why did Singapore switch to polymer banknotes?
Polymer notes enhance durability, security, and counterfeit resistance. Introduced in 2004, they last 2–4 times longer than paper notes.
3. Can I still use 1-cent coins in Singapore?
Yes, though discontinued, 1¢ coins remain legal tender. Businesses may round amounts to the nearest 5¢.
4. How does MAS regulate the SGD’s value?
MAS uses a managed float system, adjusting the exchange rate against a trade-weighted basket of currencies to maintain economic stability.
5. What’s the largest SGD banknote?
The S$10,000 note (rarely circulated) holds the highest value, primarily used for interbank transactions.
Conclusion
The Singapore Dollar (SGD) reflects the nation’s robust economy and meticulous monetary policies. From its historical ties to Malaysia to its current status as a globally respected currency, the SGD exemplifies stability and innovation. Whether you’re a traveler, investor, or finance enthusiast, understanding SGD’s role offers insights into Southeast Asia’s financial landscape.
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