Brunei

Years

Targets and attainment

Classification

1974-2012

Brunei dollar is pegged at par to Singapore dollar under currency board arrangement dating back to 1967 (which originally included Malaysia), with each country’s central and commercial banks freely accepting each other’s currency at par and with no charge (customary but not legal tender); the Brunei Currency Board (BCB) operates no monetary instruments, has no lender of last resort capability, and does not act as banker to government or to banks, while finance ministry operates only minimal supervision of (mainly foreign) banks; late 1995 reserve requirement introduced, for prudential reasons; ideas for broadening scope of BCB discussed late 1990s then put aside; 2000 Brunei International Financial Centre initiated; moves to encourage Islamic financing; 2004 Brunei Currency and Monetary Board replaces BCB, with aim of increasing forex coverage from 70 to 100% and with possibility of larger role in future; 2006 plan for deeper financial sector reform, including new central bank (which will retain currency board arrangement but take over and improve financial supervision and payments systems) and development of domestic capital market (especially via Islamic instruments); new monetary authority AMBD and new deposit protection scheme (plus asset maintenance ratio for banks) start operations 2011, credit information bureau set up 2012; statistical database poor, especially but not only on government’s foreign investments, but improvements from 2000s

pure currency board PCB

2013-2023

2013 some interest rate controls designed to increase domestic lending, later reduced or removed; continuing emphasis on financial sector reform, with new payments arrangements 2014; 2019 introduction of conventional and Sharia-compliant overnight standing facilities, improved bank supervision, macroprudential policies, plans to develop Islamic finance including sukuks; 2020-22 strong public health and fiscal response to Covid-19; statistical database better but scope for further improvement

augmented currency board ACB