What is the SGD (Singapore Dollar)?

SGD is the abbreviation for the Singapore dollar, which is the official currency of the island state of Singapore. The Singapore dollar is made up of 100 cents and is often presented with the symbol S$ to set it apart from other dollar-based currencies. It is also known as the "Sing."

Key Takeaways

  • SGD is the abbreviation for the Singapore dollar, which is the official currency of the island state of Singapore.
  • The Singapore dollar, nicknamed the "sing," is made up of 100 cents and is often presented with the symbol S$ to set it apart from other dollar-based currencies.
  • Since 1985, Singapore has allowed its dollar, which is a deliverable currency with a spot rate of T+2, to float within an undisclosed range monitored by the Monetary Authority of Singapore (MAS).

Understanding the SGD (Singapore Dollar)

The Singapore dollar was first issued in 1965 after the breakdown of the monetary union between Malaysia and Brunei, but has remained interchangeable with the Brunei dollar in both countries. Prior to this the currency of Singapore ranged from the Straits dollar to Malayan dollar to British Borneo dollar. Since the issuance of the SGD, it had been valued at par with the Malaysian ringgit until that relationship ended in 1973. The SGD is a deliverable currency with a spot rate of T+2.

The value of the dollar was originally pegged to the Great British pound (GBP) at a rate of 8.57 to 1. In the early 1970s, this peg was briefly moved to the U.S. dollar before being pegged to a hidden basket of foreign currencies between 1973 and 1985. Since 1985, Singapore has allowed its dollar to float within an undisclosed range, which is monitored by the Monetary Authority of Singapore (MAS).

The Singapore dollar is lightly correlated with the Chinese yuan (CNY) and renmimbi, however, while the MAS has a significant influence on the currency and monetary supply, it is less regulated than the currencies of China.

After the financial crisis, the SGD became one of the best-performing currencies. With a robust and growing financial center and stable house prices, Singapore became a popular destination for offshore investors. The Singapore dollar is the twelfth most traded currency in the world, and the third most in Asia, behind the Japanese yen (JPY) and the renmimbi. In 2016, the SGD accounted for 1.8% of the daily trading volume.