Assessing the Feasibility of Malaysia to Join the Singapore-Brunei Monetary Union

This paper attempts to assess the feasibility of Malaysia to rejoin the monetary union with Singapore and Brunei which it left in 1973 in terms of the real convergence criteria suggested by optimum currency areas (OCA) theory and the nominal convergence criteria specified by the Maastricht Treaty. In light of the endogeneity view of convergence criteria, the relevant features of Malaysia are evaluated against those of Singapore and Brunei to infer the degree of preparedness of Malaysia to access the Singapore-Brunei monetary union. Results suggest that Malaysia could be as good a candidate as Brunei to unify exchange rates with Singapore