![]() Singapore’s Finance Minister Lim Kim San, as early as October 1965, just two months after Separation, had raised the matter of a common currency with his Malaysian counterpart Tan Siew Sin. Mr Tan authorised the Governor of Bank Negara, Tun Ismail bin Mohd Ali, to initiate discussions with Singapore. There could be differences in design to differentiate the currency issued in Malaysia from the one issued in Singapore, though either one would be legal tender in the other.īank Negara’s suggestion was to continue the common currency arrangement, but with it issuing currency for both countries. The other issue that Singapore raised concerned the control and ownership of the reserves, in the first instance, the pool of reserves transferred from the existing currency board. This, more than the type of monetary system, was a fundamental issue for Singapore: it would only agree to negotiations if there were binding assurances that its reserves would remain under its control and management. Bank Negara understood Singapore’s concern and agreed to modify its original proposals concerning the arrangements for the management of reserves. Board of Commissioners of Currencyįinance Minister Mr Lim Kim San (fourth from left) at the first meeting of the new Board of Commissioners of Currency. Mr Lim said on Jthat Singapore would issue its own currency. PHOTO: ST FILEĪ few days later, that decision was rendered moot. The trigger was a letter dated July 11 from Mr Ismail on the status of a piece of land at Robinson Road in Singapore, the site of the proposed Singapore branch. The Malaysian view was that while the value of the land would be credited to the account of the Singapore branch, the title would remain in the name of Bank Negara Malaysia. Kuala Lumpur’s position was that the Singapore branch was not a legal entity and could therefore not own assets. If the Singapore branch could not own property, that would mean it could not be the legal owner of its reserves.
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