In today's global financial markets, the Singapore Dollar (SGD) stands as a testament to the city-state's remarkable journey. More than just a medium of exchange, the SGD encapsulates Singapore's colonial past, its struggle for independence, and its rise as a financial hub.
Singapore's monetary history traces back to the 8th century when Chinese merchants first introduced coinage to the Malay Peninsula. In the absence of an official currency, Spanish and Mexican silver dollars became widely used among Singaporean traders. The 18th and 19th centuries saw the gradual introduction of paper money, with private banks such as the Asiatic Banking Corporation, the Chartered Mercantile Bank, and the Shanghai Banking Corporation issuing their own banknotes.
The year 1845 marked a significant milestone when Singapore, then a British colony, adopted the Straits Dollar as its official currency. This currency dominated for nearly a century until 1939, when it was replaced by the Malayan Dollar—though its circulation was briefly interrupted during the Japanese occupation. In 1953, another transition occurred as the Malayan Dollar gave way to the Malaya and British Borneo Dollar.
Singapore's independence in 1965 brought about the establishment of a new monetary framework, including the creation of a currency board. The Singapore Dollar was officially launched in 1967, with its first series of banknotes featuring the orchid motif. Initially, the SGD maintained parity with the Malaysian Ringgit until 1973 when the currencies gradually diverged. The Singapore Dollar was first pegged to the British Pound at a rate of 60 SGD to 7 GBP, later shifting to a US Dollar peg before adopting a trade-weighted basket of currencies.
In 1985, Singapore transitioned to a market-driven exchange rate system with a managed float regime. The currency board was dissolved in 2002, with its functions transferred to the Monetary Authority of Singapore (MAS). Today, the Singapore Dollar has become an integral part of global foreign exchange markets, recognized for its stability and liquidity. Its evolution mirrors Singapore's economic development and underscores its significance in the international financial landscape.