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Overview

The Singapore Dollar (SGD), symbolised by S$, is the official currency of the Republic of Singapore. One dollar is divided into 100 cents. It is issued by the Monetary Authority of Singapore (MAS), which functions as both the central bank and the financial regulator.

Singapore's monetary policy is unique among major economies: instead of setting interest rates, the MAS manages the SGD Nominal Effective Exchange Rate (S$NEER) — the value of the SGD measured against a trade-weighted basket of currencies from Singapore's main trading partners. The MAS adjusts the slope, width, and centre of the exchange rate policy band twice a year.

The SGD is one of the strongest and most stable currencies in Asia. Singapore's consistently large current account surpluses, fiscal discipline, and status as the region's premier financial centre give the SGD a strong safe-haven character in Southeast Asian markets.

History

Before independence, Singapore used the Malaya and British Borneo dollar issued by a common currency board shared with Malaya, Sarawak, North Borneo, and Brunei. When Singapore separated from Malaysia in 1965, it initially kept using the Malaysian dollar.

The Singapore Dollar was introduced on 12 June 1967, replacing the Malaysian dollar at par. A Currency Interchangeability Agreement among Singapore, Malaysia, and Brunei meant the three currencies were interchangeable at par initially — this ended for the Malaysian ringgit in 1973 and for the Brunei dollar, a customary at-par peg was maintained informally.

Singapore's rapid economic transformation — from a third-world port city to one of the wealthiest nations per capita in under two generations — gave the SGD a steadily appreciating trajectory. The MAS gradually shifted from a USD peg to the current basket-based S$NEER policy in the 1980s, allowing the SGD to strengthen against trading partners as Singapore's economy moved up the value chain.

The SGD faced pressure during the 1997–98 Asian financial crisis but emerged with minimal damage compared to the Thai baht, Indonesian rupiah, or Malaysian ringgit — testament to Singapore's strong fundamentals and the MAS's framework.

Monetary Authority of Singapore & Exchange Rate Policy

The Monetary Authority of Singapore (MAS), established in 1971, is unique in using the exchange rate — rather than interest rates — as its primary monetary policy tool. This is because Singapore is a small, highly open economy where trade is roughly 3× GDP; controlling import prices through the exchange rate has a direct and powerful effect on inflation.

The MAS publishes a Monetary Policy Statement (MPS) twice a year, announcing adjustments to the S$NEER policy band. A steeper upward slope means the SGD is allowed to appreciate faster, combating imported inflation. A zero slope (neutral) maintains the current level; a negative slope allows depreciation to support growth.

Singapore has no independent interest rate policy: SGD interest rates (such as SORA — Singapore Overnight Rate Average) are determined by the market and move with global rates and the MAS's exchange rate decisions. This framework has made the MAS one of the world's most respected central banking institutions.

Key Facts

• Brunei Dollar parity — under the 1967 Currency Interchangeability Agreement (still active), the SGD and Brunei Dollar (BND) are mutually accepted at par in both countries, making them effectively interchangeable.
• Highest banknote in the world — Singapore issues a S$10,000 banknote (though it is being phased out), one of the highest denomination notes ever issued by any country.
• S$1,000 note — Singapore and Switzerland are notable for keeping very high denomination notes in circulation, reflecting low crime and a culture of cash use for large transactions.
• Top forex centre — Singapore is the third-largest forex trading centre globally (after London and New York), with average daily turnover exceeding USD 1 trillion according to BIS data.
• Consistently AAA — Singapore has maintained AAA sovereign credit ratings from all three major agencies (Moody's, S&P, Fitch) for decades, one of few countries to do so.
• SORA — the Singapore Overnight Rate Average replaced SIBOR as the key benchmark rate in 2022, aligned with global LIBOR reform.

See also: USD – United States Dollar · HKD – Hong Kong Dollar · Guide