Singapore has gained economic importance in Southeast Asia due to its strategic location on critical sea routes and its industrious population. The country has been attracting thousands of multinational corporations from across the globe due to its political stability, free market economy, business friendly environment, skilled workforce and advanced infrastructure.
The Singapore dollar (SGD or S$) is issued by the country’s central bank, the Monetary Authority of Singapore (MAS). After the issuance of the first coins and notes of the SGD in 1967, the currency was pegged to the British pound sterling. From the early 1970s, the Singapore dollar has been linked to the US dollar. Singapore started pegging its currency against an undisclosed weighted basket of currencies in 1973. In 1985, the country adopted a Monitoring Band approach, in which the SGD was allowed to float in the market. However, the value of the SGD is constantly monitored by the MAS against a basket ofcurrencies of the country’s key trading partners and competitors.
Singapore is the world’s fifth-largest foreign exchange (forex) trading market and the second largest in Asia, after Tokyo.
Singapore is among the top five financial centers in the world. Stocks are traded on the Singapore Exchange (SGX),which was formed in 1999 with the merger of two highly popular bourses, the Singapore International Monetary Exchange (SIMEX) and the Stock Exchange of Singapore (SES). SGX is Asia-Pacific's first de-mutualised and integrated securities and derivatives exchange. As of December 2007, 762 local and international companies, having a combined market capitalization of US$539 billion, were listed on this exchange. Securities trading is most popular in Singapore, with the securities market accounting for 72% of SGX’s revenues as of end-2007.