OLD CURRENCY NOTES (Total amount redeemed and rate of exchange with new ones)

Mr Lim Cheng Lock asked the Minister for Finance the total amount of old currency notes redeemed in the Republic from 12th June to 31st August, 1967, and if he is satisfied with the rate of exchange of the old currency notes for the new ones in Singapore.

Dr Goh Keng Swee: As at 31st August this year, Singapore has redeemed $271 million of the old currency. This amounts to 34.65 per cent of the total currency of the old notes redeemed so far.

Prior to 12th June, the Board of Commissioners of Currency, Malaya and British Borneo, was the issuing authority in Singapore, Malaysia and Brunei. The old notes therefore circulated in these territories and it was not possible to determine the exact amount of these notes circulating in each territory. This problem was especially acute in Singapore and Malaysia because the territories are so close to each other.

There are no figures of the exact circulation of currency notes in these two territories, and the usual method of estimation has been to take the formula given in the Currency Agreement of 1960 and this formula is used in the distribution of profits. The formula estimates that Singapore's currency circulation will be between 15 and 18 per cent, the actual percentage varying from year to year depending on population and other factors. For 1966, the percentage was taken at 15.4 per cent. Our present rate of redemption of 34.65 per cent of the total note issue so far redeemed can therefore be regarded as quite satisfactory. This experience in redemption also proves what Singapore has always maintained - the amount of currency circulating here is higher than what was provided for in the Currency Agreement.