With effect from 1st February 2004, Brunei Darussalam has enacted a new legislation named the Currency and Monetary Order 2004. This Order is intended to update the previous Currency Act of 1967 which has now been repealed.

With the introduction of this Currency and Monetary Order, the Brunei Currency Board has been renamed as Brunei Currency and Monetary Board (BCMB) and the Board composition has also been strengthened. The Chief Executive Officer of Brunei Currency and Monetary Board acts as the secretary to the Board.

Similar to the previous Act, Brunei Currency and Monetary Board remains the sole authority in Brunei Darussalam who has the right to manage and issue currency notes and coins and to maintain external reserves in order to safeguard the international value of that currency and to promote monetary stability in Brunei Darussalam.

This legislation also provides an enabling framework to strengthen the mandate of the Board to act as an agent for the government on such conditions as may be agreed between Brunei Currency and Monetary Board and the government, where Brunei Currency and Monetary Board shall act within the provisions of this Order. Sanctions and penalties for violations related to currency issuance have also been made more forceful.

The Interchangeability Agreement between Brunei Darussalam and Singapore that was established since 1967 allowing both countries to interchange the currencies at par remains intact. Under this agreement, the authority and banks of both countries are obliged to accept and exchange each other’s currencies without charge.

The main functions of Brunei Currency and Monetary Board bank are:

• To efficiently manage currency issuance and redemption as stipulated in the Currency and Monetary Order, 2004.
• To monitor and maintain external reserves in order to safeguard the international value of the Brunei currency with sufficient backup of the currency in circulation.
• To promote monetary stability by ensuring appropriate level of liquidity and monitoring the changes in key macroeconomic indicators.
• To act as an agent for the Ministry of Finance to issue Government Sukuk.
• To mint Brunei coins and issue of commemorative coins and medallions.
• To act as a depository for domestic banks’ Minimum Cash Balance (MCB) requirement for Ministry of Finance (MOF), International Monetary Fund (IMF), International Bank for Reconstruction and Development (World Bank) and Asian Development Bank (ADB).
• To liaise with international institutions such as South East Asian Central Banks for Research and Training (SEACEN) on issues pertaining to central bank functions.

Useful links

Currency of Brunei:

Brunei dollar

List of Central Banks:

Central Banks

Official website of Brunei Currency and Monetary Board:

www.mof.gov.bn

Official website of Brunei Ministry of Foreign Affairs and Trade:

www.mofat.gov.bn