What is 'BND (Brunei Dollar)'

The Brunei dollar, or BND, is the official currency of the Sultanate of Brunei. In written language, the symbol B$ is often used to distinguish the Brunei dollar from other dollar currencies.

BREAKING DOWN 'BND (Brunei Dollar)'

The Brunei dollar is subdivided into 100 sen, also known as cents in English. Its value is pegged to the Singapore dollar at par, making the two currencies functionally exchangeable. The Monetary Authority of Brunei Darussalam currently issues the Brunei dollar.

History of the BND

Between the 16th and 19th centuries, Brunei used coins called pitis as currency. The Straits dollar replaced the earlier currency in 1906, when Brunei existed as a British protectorate. In 1939, the Board of Commissioners of Currency in Malaya introduced the Malayan dollar. The Malaya and British Borneo dollar followed in 1953 when the board expanded its issue to Singapore, Sarawak and British North Borneo.

In 1967, the Malaya and British Borneo dollar split into three distinct currencies: the Brunei dollar, the Malaysian dollar and the Singapore dollar. All three were introduced at par and exchangeable until 1973, when the Malaysian government withdrew from the Currency Interchangeability Agreement. Singapore and Brunei have remained in the agreement. Under the terms of the agreement, while neither country recognizes the other’s currency as legal tender, they do agree to accept it as “customary tender.”

The Brunei Currency Board was established to issue the Brunei dollar in 1967 when the currencies split. Brunei has reconstituted the body twice since then, once in 2004 when it changed the name to the Brunei Currency and Monetary Board and the second time in 2011 when the Monetary Authority of Brunei Darussalam took over. The current monetary authority’s published objectives include maintenance of domestic price stability, regulatory efforts to ensure the financial system’s stability, assistance in establishment of efficient payment systems and development of a progressive financial services sector.

The Brunei Economy

Despite Brunei’s relatively small size, its per capita GDP is high. Brunei is a major regional oil producer and also produces a substantial amount of natural gas. The government has also been encouraging diversification in its economy, mainly in the agriculture, fishing and food industries, as Brunei’s meat supply currently comes mainly from a government-owned cattle farm based in Australia.

Major trading partners include Japan, South Korea, Thailand, India, Singapore, Malaysia, China, Australia and New Zealand. Petroleum products make up the majority of the country’s exports. Inflation rates in the country have generally trended below 1.5% since 2013.

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