The Currency Interchangeability Agreement was established in 1967 to promote monetary cooperation between Brunei Darussalam and Singapore. Under it, the Brunei Darussalam Central Bank and the Monetary Authority of Singapore accept from banks the currency notes and coins issued by the other and exchange them at par and without charge into their own currency. Banks in both countries accept the other's currency for deposit from the public and from businesses on the same terms.
In 1967 Singapore and Brunei Darussalam agreed to treat each other's money as good as their own, and the agreement has run ever since. Each central bank accepts the other's notes and coins and exchanges them at par, without charge, and banks in both countries take the other's currency for deposit on the same terms. Neither country gave up its own money to do it.
Key Takeaways
- The Currency Interchangeability Agreement was established in 1967.
- Each central bank accepts the other's notes and coins and exchanges them at par, without charge.
- Banks in both countries accept the other's currency for deposit from the public and businesses, also at par and without charge.
- Both countries keep their own currency; neither is abolished or replaced.
- The Monetary Authority of Singapore tells the public they need not be concerned about accepting Brunei currency.
What was agreed
The Currency Interchangeability Agreement was established in 1967 to promote monetary cooperation between Brunei Darussalam and Singapore.
The mechanics are set out plainly by the Monetary Authority of Singapore. The Brunei Darussalam Central Bank and the Monetary Authority accept from banks the currency notes and coins issued by the other, and exchange them at par and without charge into their own currency. Banks in both countries also accept for deposit, from the public and from businesses, currency issued by the other country, at par and without charge.
The Authority draws the practical conclusion for its own public: businesses and members of the public should not be concerned about accepting payments in Brunei currency.
Why this is not simply a peg
The two ideas overlap and are worth separating.
A peg is a statement about value: one currency is held at a particular rate against another, by whatever means the authorities use to hold it there. It says nothing about whether anyone has to accept the other country's physical money.
Interchangeability is a statement about acceptance. It commits institutions on both sides to take the other's notes and coins and to convert them at par without charging for it. That is an undertaking about handling and cost, not only about price.
In practice an interchangeability arrangement of this kind rests on parity, because exchanging at par is only sustainable if the two are held at par. But the agreement is doing something a peg alone would not: it removes the spread, the fee and the question of whether a bank will take the note at all.
And it is not a monetary union
The distinction from the euro is the clearer one.
A monetary union replaces its members' currencies with a single one, issued in common. Once that has happened there is nothing to exchange, because there is only one currency, and reversing it means recreating something that no longer exists.
Here both countries continue to issue their own notes and coins. Two currencies exist, two issuers exist, and the agreement sits between them. That leaves each country in possession of its own money and, in principle, of the ability to change the arrangement, which a member of a single currency does not have in the same way.
It is a lighter form of integration, and its lightness is the point.
What sustains an arrangement like this
The underlying commitment is larger than it looks. Each side undertakes to accept an obligation issued by the other and to give full value for it, without charging, on demand. That is a standing exposure to the other's monetary management, renewed every time a note is handed over, and it only remains tolerable while each side is content with how the other runs its money.
Size does not appear to be the constraint. Two economies of very different scale have sustained this one for nearly sixty years, which suggests what matters is that the smaller party values the link and the larger is content to honour it, rather than any balance between them.
The quiet test it has passed is institutional. The bodies that signed in 1967 have both since been reorganised, and the obligations passed to their successors rather than lapsing. An arrangement that survives the disappearance of the institutions that made it has stopped depending on the people who made it, and that the whole thing is unremarkable to those who use it is the strongest evidence it works.
The arrangement has been commemorated in the currency itself
Two countries that have honoured an agreement for decades eventually mark it, and here they did so in the medium the agreement is about. Both central banks have issued commemorative notes for the Currency Interchangeability Agreement, and the pair carry an optical security feature depicting Brunei Darussalam's Istana Nurul Iman and Singapore's Istana, using nanoparticles to produce diffractive and colour-shifting effects visible to the unaided eye and difficult to reproduce.
That is a small thing and it says something real. A commemorative note is issued by a central bank, is legal tender, and enters circulation. Putting the two countries' palaces on a shared security feature is the monetary equivalent of a joint signature, and it was done at a point when the arrangement was already old enough that nobody needed reassuring about it.
What it means in practice
For a visitor, it means the money in your pocket is usable on either side of the arrangement, and a note from the other country turning up in change is not a problem to be solved.
For anyone converting from a third currency, it changes very little. You are still buying one of the two currencies at a market price, and the interchangeability operates between them rather than between either and the rest of the world.
Where to look next
The AUD to SGD page carries the live reference rate and a short block on how Singapore runs monetary policy through its exchange rate. For the broader question of a currency being used outside its own borders, the three ways a currency gets used abroad sets out how that is measured.
Sources
- Monetary Authority of Singapore, Brunei-Singapore Currency Interchangeability Agreement - the establishment of the Agreement in 1967 to promote monetary cooperation, the acceptance and exchange of each other's notes and coins at par and without charge by the two central banks, the acceptance for deposit by banks in both countries from the public and businesses, and the Authority's advice that businesses and members of the public should not be concerned about accepting Brunei currency
- Monetary Authority of Singapore, Singapore's monetary policy framework - the exchange-rate-centred framework within which the Singapore dollar is managed
General information about a bilateral currency arrangement. Not financial advice, and not a recommendation of any product or institution. Reviewed by the Tradergy editorial team, September 2026.
Common questions
Can you use Singapore dollars in Brunei?
The two currencies are interchangeable at par under an agreement dating from 1967. The Monetary Authority of Singapore tells the public and businesses in Singapore that they need not be concerned about accepting payment in Brunei currency, since banks there accept it for deposit at par and without charge.
What is the Currency Interchangeability Agreement?
An arrangement established in 1967 to promote monetary cooperation between Brunei Darussalam and Singapore. The two central banks accept from banks the notes and coins issued by the other and exchange them at par and without charge into their own currency.
Is this the same as a peg?
Related but not identical. A peg is a policy of holding one currency at a value against another. Interchangeability is an undertaking to accept and exchange the other's physical money at par without charge, which is an agreement about acceptance rather than only about price.
Does either country give up its own currency?
No. Both continue to issue their own notes and coins, and each remains a separate currency with its own issuer. That is what distinguishes the arrangement from a monetary union, where the currencies are replaced by a single one.
Why would two countries do this?
To reduce the friction between two closely connected economies without either abolishing its currency. It removes the conversion cost of moving between them for ordinary payments while leaving both countries in possession of their own money.