What is SGD
SGD is the abbreviation for the currency of Singapore, the Singapore dollar. This abbreviation is often used in the currency market, also known as the Foreign Exchange market, which is the largest financial market in the world and has a daily average volume of over US $1 trillion.
The Singapore dollar, which is abbreviated with a $ or S$, is made up of 100 cents. Denominations of the Singapore dollar include banknotes of S$2, 5, 10, 20, 100, 1000 and 2000, as well as coins for 1, 5, 10, 20 and 50 cents as we well as S$1 coins.
Breaking Down SGD
The Singapore dollar first circulated in 1967. Before that year, Singapore used a variety of other currencies.
Initially, the Singapore government pegged its dollar to the British pound at a rate of 60:7. In the 1970s, the Singapore dollar was very briefly tied to the U.S. dollar. Then, between 1973 and 1985, it was pegged to a hidden basket of foreign currencies. Since then, the Monetary Authority of Singapore (MAS) has allowed the Singapore dollar to float.
The Singapore dollar is one of the most highly traded currencies in the world, and in Asia only behind the Japanese yen and the Chinese Renmimbi.
The country’s economy, which briefly contracted because of the global financial crisis in 2009, grew at a rate of 3.6 percent in 2017. Singapore is highly dependent on exports including electronics, pharmaceuticals, chemicals and petroleum products. Additionally, Singapore has a robust financial sector and stable real estate prices, which has attracted offshore investors.
History of the Singapore Dollar
Singapore was a dependency of Bengal from 1819 to 1826, after which it was a part of the Straits Settlements, which included Malacca and Penang as well as Singapore. Initially, the Straits Settlements used the Straits dollar as their currency. The Malay dollar replaced the Straits dollar in 1939, and the Malay dollar later became the Malaya and British Borneo dollar.
In 1946, after the Straits Settlements were dissolved, Singapore became a British colony. A few decades later, in 1963, Singapore became part of Malaysia, and in 1965, the city-state left Malaysia to become an independent nation.
A few years later, in 1967, the nation state established the Singapore dollar after the breakdown of the monetary union between Malaysia and Brunei. The three currencies were exchanged at par until 1973, when Malaysia left this agreement. To this day, the Singapore dollar remains interchangeable with the Brunei dollar.