BRUNEI DARUSSALAM

Country Overview
Ministry of Finance
 State of Brunei Darussalam or the Nation of Brunei,
the Abode of Peace

Located on the north coast of Borneo

Surrounded by the state of Sarawak, Malaysia

Inside another country which is itself discontiguous

 14th – 16th Century : seat of Sultanate that covered
Sabah, Sarawak, Philippines (Mindanao)

 19th Century: British protectorate (1888-1984

 Fully independent state in 1984

 Legislative Council (parliament)

 Natural Resource: Oil

 Brunei Darussalam operates a Currency Board system
and has no Central Bank. The Government under the
Banking Acts and Finance Companies Act regulates the
banking industry.
The Ministry of Finance through the Financial
Institutions Division closely regulates all banking
activities to ensure a stable and fiscally sound business
environment. The Brunei Currency Board is
responsible for issuing and managing the currency.

http://brunei.gov.bn/about_brunei/economy.htm
Section 80 of the Constitution of Negara Brunei Darussalam
(Financial Procedure) Order:
 control and management of public finances
 supervision, control and direction of all matters relating to
the financial affairs of Brunei such as the Consolidated
Fund, the Consolidated Revenue Account, the Consolidated
Loan Account, the Consolidated Trust Account including
the preparation of their annual statements
 write off losses or deficiencies of public money and the
value of lost, deficient, condemned, unserviceable or
obsolete stores and to abandon irrecoverable amounts
of revenue, debts and overpayment
 responsible for any deficiency in, or for the destruction
of, any public moneys, stamps, securities, stores, or
other property of the government
The mission statement assures that the financial
policies and regulations be carried out to
achieve a stable financial environment, to
ensure the international and public confidence
in the nation's financial system and at the same
time to encourage the development of the
financial sector.
 Monetary Policy
Role of Central Banks
Brunei’s Monetary Authorities
is the process by which the government & central
bank /monetary authority of a country controls
(i) the supply of money, (ii) availability of money,
and (iii) cost of money or rate of interest,
in order to attain a set of objectives oriented
towards the growth and stability of the economy.
EXPANSIONARY POLICY CONTRACTIONARY POLICY
 increases the total supply of  decreases the total money
money in the economy; supply;

 traditionally used to combat  involves raising interest

unemployment in a rates in order to combat
recession by lowering inflation
interest rates
have the task of executing the monetary policy and often
independently of the executive;

often have other responsibilities such as supervising the

smooth operation of the financial system
 Has no Central Bank (BCMD; FID)

 Mirrors Singapore’s

 Exchange Rate monetary policy

The Ministry of Finance (MOF), through the
Brunei Currency and Monetary Board (BCMB)
and the Financial Institutions Division (FID),
exercises most of the functions of a central bank.
established February 1, 2004 pursuant to Section 3(1) of the Currency and Monetary
Order, 2004 which was formally known as Brunei Currency Board (BCB)


has the sole authority to manage and issue currency
notes and coins

maintains external reserves in order to safeguard the
international value of Brunei Dollars

promotes monetary stability of the country

to have a strong and dynamic financial system

  

The Board, chaired by the Minister of Finance,
oversees the management of BCMB


The Chief Executive Officer, who heads the
management of BCMB, also acts as the secretary to the
Board
 regulator of finance, banking and insurance sectors

 tasked with the issuing of licenses and regulations to

financial institutions including the enforcement of
minimum cash balances (MCB)

 responsible for financial stability and supervision of

the financial sector
 Banking Unit
 Insurance Unit
 Finance Companies Unit
 Money Changers and Money Remittance Unit
 Securities
 Financial Intelligence Unit
A currency interchangeability agreement was
established between Singapore and Brunei.

Brunei has a currency board arrangement (CBA)

where the Brunei dollar (B$) is pegged to the
Singapore dollar (S$) on a one-to-one parity.
 Currency
Currency Notes and Issues in Circulation
Counterfeit Notes & Coins

Early currency in cowrie shells

Famous for its bronze teapots, which were used as
currency in barter trade

issued tin coins denominated in pitis in 1868

followed by a one cent coin in AD 1888 (one hundredth
of a Straits dollar)
 Straits dollar and later the Malayan dollar and the
Malaya and British Borneo dollar until 1967, when it
began issuing its own currency, after the formation of
Malaysia and the independence of Singapore

 Until June 23, 1973, the Malaysian ringgit was

exchangeable at par with the Singapore dollar and
Brunei dollar.
The Monetary Authority of Singapore and the BCMB
still maintain the exchangeability of their two
currencies. The dollar is accepted as "customary
tender" in Singapore according to the Currency
Interchangeability Agreement, although it is not legal
tender there. Likewise, the Singapore dollar is
customarily accepted in Brunei.
BCMB has been engaging in the production of the Brunei
notes and coins.
Unit currency: Brunei dollar (divided into 100 cents) 
Exchange Rate: US$1.00 = between B$1.43 and B$1.60 
Dec. 31, 2007: total currency in circulation stood at B$
848.65 million, comprised of B$818.51 million in notes
and B$30.14 million in coins 
BCMB had issued various series of notes of denomination
B$1, B$5, B$10, B$25, B$50, B$100, B$500, B$1,000
and B$10,000.
Note Designs
B$10,000: had only one design (1989) 
B$25: Special Issue (1992) to commemorate the Silver
Jubilee of His Majesty Sultan Haji Hassanal Bolkiah
Mu’izzaddin Waddaulah Sultan and Yang Di-Pertuan
Negara Brunei Darussalam accession to the throne.

inspired by Malay and Muslim decorative art motives

PAPER NOTES
Feel of the Paper
Quality of Printing
Watermark
Security Thread
COINS
As for coins, the genuineness is determined by two
other factors i.e. the tone and finish, besides the
specifications of sizes and weights. 
The Currency and Monetary Order of 2004 has
various provisions which if contravened, one is guilty of
an offence and liable on conviction to a fine,
imprisonment for a term not exceeding 15 years or
both