Singapore Dollar – Currency Overview

• ISO Code: SGD
• Symbol: S$
• Subunit: 1/100 cent
• Inflation: 2.1%
• Nickname: Sing

Historical Overview

The principal coin in the realm of Singapore in the 1700s were Spanish Dollars until these were replaced by The East Indies Company Dollar (XEID) around 1788, and by the Indian Rupee in 1858. The main currency between 1845 and 1939 in Singapore was the Straits dollar, which was then replaced by the Malayan dollar. From 1953, the Malaya and British Borneo dollar, were both official legal tender in Singapore, and went on to be so when Singapore joined the monetary union between Malaysia, Singapore and Brunei. In1965 Singapore was expelled from this union, which proceeded to break down two years later. The Board of Commissioners of Currency was established in Singapore on April 7, 1967 and started issuing its own coins and notes. The Singapore dollar was still exchangeable at par with the Malaysian ringgit until 1973, and its interchangeability with the Brunei dollar is still upheld till this day.

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The Singapore dollar initially had a peg to the British pound at the rate of S$60 = £7. After the demise of the Sterling Area in the early 1970s, the Singapore dollar underwent a short-lived peg to the US dollar, however as Singapore's economy flourished and its trade diversified, the currency was moved to being pegged against an undisclosed and fixed trade-weighted basket of currencies from 1973-1985. Since then, Singapore adopted a regime in which the Singapore dollar is allowed to float while being closely monitored by the Monetary Authority of Singapore (MAS) against Singapore's major competitors and trading partners. This enables Singapore's government to have more control over imported inflation and to make sure that exports remain competitive. In the interest of maintaining public confidence, all issued currency in circulation is fully backed by international assets.

In 2002, the functions, property and liabilities of Singapore's Board of Comissioners of Currency were transferred to the MAS.

Current Global Status

The Singapore dollar today is a free floating, albeit closely monitored, currency. This renders the currency stable enough to incur significant interest in the forex market. Although the currency is not among the 8 most traded major currencies, it remains an attractive alternative or "exotic" choice for those looking to invest in a stable and upward trending currency but want to stay away from the current fluctuations in the major currencies. Seeing as the Singapore economy finished 2007 with a growth rate of 7.9%, the future also looks bright for the Singapore dollar.

Against the USD

In the early 1970 the Singapore dollar was pegged to the US dollar. Since it's becoming a free floating currency it has been ranging at around S$0.60=US$1. However, since the dollar's phenomenal and rapid crash in 2008 the Singapore dollar has been trading against it at a rate of around S$70 = US$1.

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