Historical Sketch

The Sultanate of Brunei was founded in 1363 and initially comprised the entire north of the island of Borneo. In the 19th century, Brunei lost more and more territory to Great Britain and was finally placed under a protectorate in 1888. The Sultan was maintained on the throne but got effectively deprived of all powers in 1906 by a British Resident, thus establishing colonial rule. During World War II, Brunei was occupied by Japan, and British rule got restored after the Japanese defeat. In 1959, the British Residency ended, and Brunei attained full independence in 1984.

Monetary History Overview

Traditionally, the economy on the Malay Peninsula and neighbouring Borneo was based on silver. In transactions, bullion was used, supplemented by small coins made of tin and lead or, occasionally, copper. The value of the so called "Pitis" against silver varied both regionally and over time. In the 17th and 18th centuries, the silver Spanish Dollar made its way into the Malay territories through trade with the Europeans. After Great Britain had established the protectorate in 1888, the Straits Dollar became Brunei's effective currency. Around 1887, a local copper coin had been issued in the standard, which had, strictly speaking, no legal base, since treaty of the following year did not regulate currency. Only after the establishment of the British Residency in 1906, the Straits Dollar got proclaimed sole legal tender and the Spanish Dollars and other circulating coins got withdrawn. When the British administration created a common currency area on the Malay Peninsula in 1940, Brunei was the only Borneo territory to participate. During the Japanese occupation in World War II, the Straits Dollar was abolished and replaced by the Japanese military currency for Malaya. After liberation, the pre-war monetary situation was restored. In 1952, the Malayan common currency area got extended by neighbouring Sarawak and North Borneo State. Now all British possessions in Borneo shared the same currency, the Malaya and British Borneo Dollar. It remained in place until the end of the colonial rule in Malaysia. In June 1967, the common currency area between Malaysia, Singapore and Brunei was dissolved, and the three states introduced distinct national currencies. The Brunei Dollar was introduced on par and remained pegged to the Pound Sterling, but re-pegged to the US Dollar when Great Britain floated its currency in November of the same year. In 1973, the Malaysian and Singaporean currencies were floated. Brunei attached its currency to the Singapore Dollar, banknotes and coins are mutually recognized in the two countries. Brunei has introduced a 15% fluctuation margin in 2018, but the two currencies continue to develop in parallel.

Brunei joined the International Monetary Fund (IMF) on 10.11.1995.

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