Photo of Brunei currency from shutterstock.com

Banks accept Singapore and Brunei currencies at par under Currency Interchangeability Agreement but private entities are not required to do the same

A reader wrote to The Online Citizen expressing her question on the status of the usage of Brunei currency here in Singapore, given that Singapore has bilateral agreements in place “allowing” its usage from decades ago.

She wrote,

“I had twice experienced rejection of the Bruneian dollar when my friend from Brunei and myself tried to use it, once at a coffee shop in 119 Aljunied Ave 2 and another time, at Dal.komm in Orchard Centrepoint!

On both occasions, the staffs concerned claimed they have either no knowledge of the existence of such an “agreement” in place as no one has attempted to use them in their shops before or the one at Dal.komm stating that a local bank has specifically told them the banks generally “do not” accept the trading of the Bruneian currency in their branches. In view of this, I hope you can share this undue development with the public so as to clear up confusion on the ground and halt the usage of the currency if the “suspicions” are indeed true.”

When queried, a spokesperson from the Monetary Authority of Singapore (MAS) noted that the Currency Interchangeability Agreement (CI Agreement) signed between Brunei and Singapore requires MAS, and conversely the Autoriti Monetari Brunei Darussalam, to accept from banks in Singapore, Brunei currency notes and coins and exchange such notes and coins, at par and without charge, into Singapore currency notes and coins. Banks in Singapore have been informed of this arrangement and have been accepting from the general public, including businesses, at par and without charge, Brunei currency notes and coins.

However, MAS points out that the CI Agreement does not require private entities, including individuals and businesses, to do likewise. Therefore, unlike Singapore currency which is legal tender in Singapore, Brunei currency is only customary tender, i.e. a foreign currency commonly accepted in Singapore at par value without charge. As such, MAS cannot require businesses to accept Brunei currency but can only encourage them to do so.

It further noted that the payment for goods and services is essentially a contractual matter between a buyer and a seller. Before entering into a transaction, both the seller and the buyer can specify how the payment is to be made (including the currency and denominations that they will accept) and both parties must agree to it.

“Nonetheless, in keeping with the spirit of the CI Agreement, MAS has been working with the Singapore Tourism Board, landlords and relevant trade and business associations (including transport, retailers and restaurant associations) to educate businesses on the acceptance of Brunei currency in Singapore. Consumers who encounter difficulties paying a retailer in Brunei currency can provide MAS with its name, full address, and if possible the contact number, so that MAS can contact the retailer concerned.” wrote MAS.