Tuesday, August 25, 2009


In 1950, the Board of Commissioners of Currency, Malaya and British Borneo was formed for the sole purpose of establishing a standard currency for common circulation in member countries namely the Federation of Malaya, Singapore, British North Borneo (presently known as Sabah), Sarawak and Brunei. Similar to the currencies issued during the Straits Settlements era, the intended currency was also to be backed by Sterling to

the value of two Shillings and four Pence for every Dollar.

Between 1953 to 1961, coins with denomination of I Cent, 5 Cents, 10 Cents, 20 Cents and 50 Cents with bust of Queen Elizabeth on obverse and legend “Malaya and British Borneo” on reverse, were issued for circulation. To complement these coins, a set of paper currency with value of $1, $5, $10, $50, $100, $1000 and $10000 with obverse bearing the portrait of Queen Elizabeth II, watermark of a tigers head and the signature of Sir W. C. Taylor were also issued. The reverse of these notes bore the crests of the Federation of Malaya and its eleven member states, namely Perak, Pahang Negri Sembilan, Perils, Kedah, Kelantan, Trengganu, Johore, Penang and Malacca, Singapore, British North Borneo, Sarawak and Brunei.

It was during Japanese occupation that people began to realise that colonisation had not spare them the fate of being invaded by the Japanese. The struggle during the short span of 3 years of Japanese occupation had inculcated a sense of self independence amongst the people. Thus, with the surrender of the Japanese and the return of the British, peoplewere unwilling to be under colonial rules again an

d the urge to be independent became


In July 1955, the UMNO-MCA-MIC Alliance led by Tunku Abdul Rahman contested in the First General Election and emerged winner with a majority of 51 out of 52 seats, confirming the unanimous desire of the people to be independent. It was not until 31st August 1957 that the Queen of England and the governors of Malaya signed the Treaty of Malaya Federation and officially announced the independence of the Federation of Malaya.

Singapore too entered into a new political era at about the same time. In May 1959,under the new constitution, the first General Election was held to form the first Parliament. People’s Action Party led by Mr Lee Kuan Yew won by a majority and this decisively marked the end of colonial rule in Singapore.

After independence of the Federation of Malaya, Bank Negara Tanah Malaysia was incorporated on 26th January 1959 (in accordance with the provision of the Act of the Malaya Central Bank). The main objective of the Bank was to issue its own currency to enhance the growth and stability of the country’s economy. Under the Act, the Bank had the sole right to issue currency for the Federation of Malaya only. However, the Bank could only have this authority to issue currency after the Board of Commissioners of Currency, Malaya and British Borneo terminated. . Thus, for the sole use of the Federation of Malaya, the Board of Commissioners of Currency, Malaya and British Borneo had specially ordered the design of a set of notes with face value of $1, $5, $10, $50, $100, $1000 and $10000 to be issued on 21st March 1959 after the Independence.

The obverse of these notes would still bear the signature of Sir W C Taylor but to highlight the independence of the Federation of Malaya, the portrait and legend of Queen Elizabeth was omitted and the reverse bore only the crests of the Federation of Malaya.

However, if this set of notes were to be issued, it might precipitate an irrevocable severance of monetary relations with Singapore and the Borneo territories as they were sharing another common currency at that time. Because of this, these notes were never issued. Instead, the Board of Commissioners of Currency, Malaya and British Borneo made some amendments to the original design and issued both the $1 and $10 notes only.

On 1st March1959 the $1 was issued. The rubber tapper on the obverse of the original design was replaced by the fisherman sailing boat and the note was signed by the then Financial Chairman, Mr Lee How Sect. The reverse of the note, however, remained unchanged. The $10 note was issued on 1st March 1961, the obverse bore the original design of a farmer with a buffalo ploughing the padi field while the wordings at the left bottom corner was amended. The note was signed by the then Financial Chairman, Tun Tan Siew Sin. The reverse was totally amended. Both the reverse of $1 and $10 notes bore the crest of the Federation of Malaya as well as the legend of Singapore, Borneo, Sarawak and the State of North Borneo. (The crest of the 11 states of Malaya had been omitted).

On 27th May 1961, Tunku Abdul Rahman officially announced the proposal of the formation of “Malaysia” and on 3rd June the same year; National Day of the State of Singapore, Mr Lee Kuan Yew announced his support. Shortly after, the two governments met and an agreement was made. Singapore would look after her own

labour and educational affairs and leave the defence, foreign affairs and internal security to the Malayan authority. On 9th July 1963, governors of the different states met at London for the last time to prepare for the incorporation of the “Malaysia Agreement” by the Federation of Malaya, England, the States of North Borneo, Sarawak and Singapore.

Brunei opted out when the financial arrangements and the authority of the Sultans could not reach an agreement.

On 31st August 1963, Malaysia finally gained independence. With that, the Bank Negara Malaysia took over the sole right to issue currency from the Board of Commissioners of Currency, Malaya and British Borneo and this authority extended to include all states of Malaysia.

On 9th August 1965, Singapore officially announced its separation from Malaysia and became an independent republic.

On 12th June 1967, Singapore, Malaysia and Brunei decided to issue their own separate currency. (Brunei, on 1st January 1984, became independent also).

On 18th November, 1967, the British government announced the depreciation of the Pound. Both Singapore and Malaysia government, however, decided that the new currency issued during June of that year will not be depreciated. The old currency issued by the Board of Commissioners of Currency, Malaya and British Borneo could be exchanged for the new at the rate of $1 to $0.857. To avoid any disorder, the value of the I Cents, 5 Cents and 10 Cents coins remained unchanged and was allowed to be in circulation until new coins were issued. The currency issued by the board of Commissioners of Currency, Malaya and British Borneo formally ceased to be in use after 15th January 1969.