Singapore Dollar (SGD): Definition, Currency Symbol, History

What Is the Singapore Dollar (SGD)?

The term Singapore dollar (SGD) refers to the official currency of the Southeast Asian island state of Singapore. The currency is issued and maintained by the country's central bank. The dollar is abbreviated as SGD and is represented by the symbol S$ to set it apart from other dollar-based currencies. Singapore dollar banknotes are printed in denominations between S$2 and S$10,000. A single SGD is divided into 100 cents with coins minted in one cent to S$5 denominations.

Understanding the Singapore Dollar (SGD)

The Singapore dollar was introduced in 1967 shortly after the island seceded from the Federation of Malaysia. The currency was originally produced by the Board of Commissioners of Currency until it merged with the country's central bank, the Monetary Authority of Singapore, in 2002.

The currency's banknotes are printed in the following denominations: S$2, S$5, S$10, S$20, S$25, S$50, S$100, S$1,000, and S$10,000. As noted above, a single SGD is divided into 100 cents. The central bank is responsible for minting coins in the following values: one, five, 10, 20, and 50 cents. It also produces S$1 and S$5 coins, too.

The Singapore dollar, which is commonly referred to in the foreign exchange market as the sing, was kept at par with the Malaysian ringgit until 1973. Since then, it has been pegged to a fixed but undisclosed basket of currencies that are associated with the republic's diverse trade links.

The Singapore dollar is the 12th most traded currency in the world, and the third-highest in Asia, behind the Japanese yen (JPY() and China's renminbi. The SGD accounts for nearly 1.8% of daily volume in currency trading. Since the financial crisis of 2007–2008, the SGD became one of the world's best-performing currencies. With a robust and growing financial center, stable housing prices, and undemanding regulatory practices, Singapore has become a favored destination for offshore investors and entrepreneurs.

Special Considerations

According to Singapore's central bank, about S$60.3 billion was in circulation as of 2021. The dollar is fully backed by gold, silver, and other assets that are held by the nation's central bank.

In late 2020, Fitch Ratings reaffirmed its AAA rating on the Singapore dollar, despite the significant impact of the COVID-19 pandemic on the nation-state's economy. Fitch cited its "exceptionally strong external and fiscal balance sheets, high per capita income, sound macroeconomic policy framework, and strong business environment."

Singapore's Economy

Singapore has been a major trading and shipping hub since the early 19th century when Britain's East India Company spotted its potential as a commercial hub for its Asian trade. It remained a British crown colony before and after its occupation by Japan during World War II.

After gaining its independence in the 1960s, Singapore went through a period of manufacturing growth and developed rapidly into a high-income nation. Manufacturing and the services sectors remain its key drivers of growth. It also is a key financial services center for the region and remains an important port.

Singapore has one of the world's most business-friendly regulatory environments for entrepreneurs, according to the World Bank. Its status as a world-class business hub is more impressive in light of its tiny size. The entire city-state has a population of less than 5.45 million.

The island republic is one of the four Asian tigers whose economies have sustained a high rate of growth since the 1960s, propelling them into the ranks of the world's wealthiest nations. The other Asian tigers are Hong Kong, Taiwan, and South Korea.