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Currencies
BRUNEI DOLLAR
Introduction | Overview | Structure | History | Factors affecting change in exchange rates | Daily trend of Brunei dollar | Weekly trend of Brunei dollar
Introduction


Brunei dollar also popular as ringgit Brunei in Malay language, is the national currency of the State of Brunei and is one of the major dollar dominated currencies in Asia. The country switched over to the currency from Malay and British Borneo dollar in 1967. Like almost all the dollar currencies are denoted, Brunei dollar also, is denoted with "$" sign, and to differentiate from other dollar currencies, with "B$" sign alternatively. "Sen" forms the sub unit of the currency and breaks 1 unit into 100 equal parts. Brunei dollar has its ISO 4217 currency code as BND and numeric code as 096.

Overview


The economy of Brunei is counted among the fairly successful economies in the world. Crude oil and gas provide cushion and are the major revenue sources for the country. Though, often looked upon as a diversified economy due to a mixture of foreign, domestic and government participation, it is effectively bound by its strong currency. Brunei dollar is pegged with the Singapore dollar, the latter being the official currency of country’s major trading partner. Moreover both the currencies have same values and are accepted as a customary tender in the other country. The import of local currency in the country does not have any limit amount and the import of other foreign currencies is free but before that it has to be declared except Indian banknotes. The limit for export of the local currency is $1000 in banknotes. In recent developments, polymer banknotes were also issued and circulated for the smaller values of the notes to counter forgery.

Structure

The Brunei dollar was introduced in 1967 i.e. much before the country gained its independence. Brunei currency board was established to manage the currency flow in the country with the issuance of the Currency Act. The currency board has the sole authority to manage and issue currency notes as well coinage in the currency. Brunei dollar banknotes are issued in 9 denominations that are $1, $5, $10, $25, $50, $100, $500, $1,000 and $10,000. The banknotes in circulation comprise of both paper currency notes as well polymer currency notes, the latter being used for the smaller denominations of currency i.e. $1, $5 and $10 due to their high usage. The sizes of these notes vary according to the value they possess; lesser value gets the smaller size. The currency notes have different colors and the backside design on the notes depict various landscapes relating to the identity of the country. The following list mentions the different colors and landscapes for different currency notes
  • $1 (Blue, yellow and green) - Rainforest waterfall
  • $ 5 (Green, yellow and blue) - Rainforest floor

  • $10 (Red, yellow and brown) - Rainforest canopy

  • $25 (Purple, brown, green and light orange) - Crowning ceremony and the royal crown

  • $50 (Brown, green and blue) - Oilrig

  • $100 (Blue and orange) - Brunei international airport

  • $500 (Orange and brown) - Padian woman paddling her boat

  • $1000 (Brown) - Kampong Ayer and Istana Nurul Iman

  • $10000 (Green) - Bandar Seri Begawan

Smaller values of currency are issued in the form of coins. Coinage, currently, is being issued in 5 denominations i.e. 1, 5, 10, 20 and 50 sen. The old $1 coin is still accepted as a legal tender in Brunei though it is not minted now. The obverse sides of the coins in 3 different series have engraved portraits of different sultans of the state, i.e. the 1967 issue possess the image of late Sultan Omar Ali Saifuddien Sa’adul Khairi Waddien , the 1968 and 1993 issues have the image of Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah Sultan and Yang Di-Pertuan of Brunei Darussalam. The reverse sides of the coins have designs that are symbolic as mentioned in the following list

  • 1 sen - local design representing a bird

  • 5 sen - tree shaped design representing a bird

  • 10 sen - claw shaped design representing an animal

  • 20 sen - vertical pattern representing a tree

  • 50 sen - crest of Negara Brunei Darussalam

The usage of coinage in Brunei dollar is controlled by the following regulations

  • Coins of denominations lesser than 50 sen cannot be used for paying off an amount exceeding $2

  • Coins of denominations 50 sen and $1 cannot be used for paying off an amount exceeding $10

  • Coins of denominations greater than $1 can be used for paying off any amount
History


Before the time when proper currency coins were issued in Brunei, cowry shells formed the part of currency system. Also, bronze teapots were exchanged in the barter trade regime. But in 1868, the country issued tin coins valued in ½ and 1 pitis. This was the time when the concept of a proper and consistent currency got induced. In 1888, the British took over the control of the country and introduced the straits dollar as the new currency and the first 1-cent coin was minted. As a British colony, Brunei had to use straits dollar as its currency for a long time and then the Malayan dollar came into existence in around 1940. For 13 years, the Malayan dollar was accepted as a legal tender till it got replaced by the Malaya and British Borneo dollar.

In 1967, Brunei started issuing its own currency in the form of Brunei dollar with the coming of the currency act and the establishment of the Brunei currency board. Till date, three issues of coinage have been made in 1967, 1968 and 1996 respectively. Also, in context of banknotes, four issue have been since 1967

  • 1967 issue - the front sides of notes depicted the portrait of the late Sultan Sir Omar Ali Saifuddin
  • 1968 issue - the portraits were replaced by the portraits of Sultan Hassanal Bolkiah
  • 1989 issue - this was the first post independence bank note series having two versions of the $50 note
  • 1996 issue - polymer series
Factors affecting the exchange rates between two countries


The volatility in the foreign exchange rates depends upon a numerous macro economic factors that have different degrees of importance to different economies of the world. Some special and exceptional factors affecting the rates may also exist in the case of different countries. Following are shown the common factors on which the foreign exchange rate depends

  • Flow of imports and exports between the countries
  • Flow of capital between the countries
  • Relative inflation rates
  • Fluctuation limits on exchange rate imposed by the governments of the countries
  • Merchandise trade balance
  • Rate of inflation in the country
  • Flow of funds between the countries for the payment of stock and bond purchases
  • Relative growth
  • Short term and long term interest rate differentials
  • Cost of borrowings
 
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