A currency board tied to the Singapore dollar

Brunei's currency, the Brunei dollar, has been interchangeable at par with the Singapore dollar since 1967, under an agreement between the two countries, and is backed by foreign-exchange assets. Autoriti Monetari Brunei Darussalam, the monetary authority, supervises the financial system, but it does not set an independent monetary policy: interest rates follow those of Singapore and, indirectly, the world market. This arrangement has kept inflation very low and stable, often close to zero and sometimes negative, and it suits a small economy whose exports are mostly oil and gas priced in US dollars. The country's growth swings come from energy prices and production levels, not from monetary policy, which is why Brunei's output series follows oil and gas markets while its inflation and exchange-rate series are almost flat.