Author Topic: Customary Tender  (Read 3771 times)

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Offline Prosit

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Customary Tender
« on: February 18, 2011, 02:45:57 PM »
In the February 2011 issue of “World Coin News” there is an article titled “Brunei changes, composition, weight of 5-cent coin”.  I will paraphrase or quote some of that article.

In 1967, the Brunei dollar replaced the Malaya and British Borneo dollar following the formation of Malaysia and the Ringget was exchangeable at par until 1973.  After 1973 the Monetary Authority of Singapore and Brunei Currency and Monetary Board retained exchangeability of the currencies.

Under the current agreement neither currency are “legal tender” in the other, however each are accepted by agreement and the author called that “Customary Tender”.

I have never heard the term “Customary Tender” although I assume the situation it refers to is not that uncommon?

Anyone know of others were the currency isn’t legal tender but is accepted?  And not just accepted (that happens all the time) but accepted by governmental agreement?

Dale

Offline Bimat

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Re: Customary Tender
« Reply #1 on: February 18, 2011, 03:17:27 PM »
Anyone know of others were the currency isn’t legal tender but is accepted?  And not just accepted (that happens all the time) but accepted by governmental agreement?
I can think of Nepal where Indian currency is widely accepted but not a legal tender. You can spend it anywhere in Nepal but there's no government agreement AFAIK..But there's a limit on how much Indian currency you can keep at a time..

Aditya
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Offline chrisild

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Re: Customary Tender
« Reply #2 on: February 18, 2011, 04:02:58 PM »
Not sure what the situation in the UK and Ireland until early 1979 was called, but it may come close. Similarly, Belgium and Luxembourg shared the same franc before the euro was introduced. In both cases however, the cash from the bigger country was accepted in the smaller one but not necessarily the other way round ...

As for the Singapore-Brunei agreement, here is some info:
http://www.mas.gov.sg/currency/currency_info/Currency_Interchangeability_Agreement.html

One practical difference between customary tender (in the SG/BN sense) and legal tender could be that each of these two countries apparently sends the other's cash back: "Any excess Brunei or Singapore currency is repatriated regularly, with the issuing institution bearing the costs, and settlements are made in the other country’s currency." http://www.aseansec.org/carh/Capital%20Account%20regime%20files/BRUNEI%20DARUSSALAM%20CAP%20ACC%20REGIME.pdf  That would not make sense in a "full" currency union.

Christian

Offline Coinsforever

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Re: Customary Tender
« Reply #3 on: February 18, 2011, 04:08:01 PM »
I can think of Nepal where Indian currency is widely accepted but not a legal tender. You can spend it anywhere in Nepal but there's no government agreement AFAIK..But there's a limit on how much Indian currency you can keep at a time..

Aditya



If you refer any of travel /tourism website about Travel to Nepal :  under currency it is mentioned explicitly.

Indian currency of Rs.500 and Rs.1,000 bills are not allowed to be brought into Nepal. They will not be exchanged and will not be accepted for transaction of any kind.


But in contrary to above all the forged notes of bigger denominations has been  routing form this channel as per reports of RBI & Indian customs who has been  confiscating these illegal tenders.

Another example could be Hong Kong - Dollars, Chinese- RMB , Taiwan -Dollars due to different administrative regions , operating under 3 countries 1 policy system as per main land.

 
Cheers  ;D
« Last Edit: February 18, 2011, 04:13:52 PM by aan09 »
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Offline <k>

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Re: Customary Tender
« Reply #4 on: February 18, 2011, 04:08:05 PM »
Not sure what the situation in the UK and Ireland until early 1979 was called, but it may come close.

For most of the 1970s, the Irish punt was kept at par with the UK pound sterling. However, Irish coins and notes were NOT accepted in England during that time, though occasionally some coins would slip through. I don't know what the situation was in the Irish Republic.
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Offline FosseWay

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Re: Customary Tender
« Reply #5 on: March 23, 2011, 02:47:49 PM »
Belgium and Luxembourg shared the same franc before the euro was introduced. In both cases however, the cash from the bigger country was accepted in the smaller one but not necessarily the other way round ...

That is similar to the current situation in the Isle of Man and Channel Islands. I don't know what the legal status of UK sterling is in the islands, but it circulates freely alongside local currency, whereas you'll only be able to spend IoM and CI coins on the mainland through the inobservance of the retailer. By and large, retailers will reject them if they notice you're using them; ironically, they're more likely to do this with perfectly good Dependency coins than they are with the wide range and large quantities of forged homeland £1 coins.

Austrokiwi

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Re: Customary Tender
« Reply #6 on: March 23, 2011, 03:13:48 PM »
I believe the Scottish pound  may fall into the realm of Customary tender.......My understanding is Scotland does not have legal tender.