2.0 IntroductionExchange rate gives a great influence on the development of a country. Tourism, consumption and human resources are the three most obvious sectors affected by the exchange rate. The exchange rate of the Malaysian ringgit (MYR) to the Singapore dollar (SDG) has been declining year by year since 1980. This problem has an impact on Malaysia, especially the state of Johor, since Johor does not is just a strait away from Singapore. In this chapter, information on the exchange rate of the currencies of Malaysia and Singapore is given.2.1 CurrencyAccording to Hornby (2005) in the Oxford Advanced Learner's English-Chinese Dictionary, currency is defined as "the monetary system which 'a country uses'. Each country uses its own currency or shares the same currency with another country. In Malaysia, the currency used is the Malaysian ringgit (short form: MYR; symbol: RM), while in Singapore, it is the Singapore dollar (short form: SGD; symbol: $). The US dollar (short form: USD; symbol: $) is used in many countries in addition to their own currency. In these different currencies, there are eight most tradable currencies chosen by Lee (2013). The ranking is shown in the table below.Table 2.1: Eight Most Tradable CurrenciesRanking Currency Central Bank1st US Dollar (USD) Federal Reserve (Fed)2nd European Euro (EUR) European Central Bank (ECB)3rd Japanese Yen (JPY) Bank of Japan (BoJ)4th British Pound (GBP) Bank of England (BoE)5th Swiss Franc (CHF) Swiss National Bank (SNB)6th Canadian Dollar (CAD) Bank of Canada (BoC)7th Austrian/New Zealand Dollar (AUD/NZD) Reserve Bank of Australia / Reserve Bank of New Zealand (RBA / RBNZ)South African 8th Rand (ZAR) South African Reserve Bank (SARB)2.2 Foreign Exchange Market (FOREX)... ... middle of paper ...... Singapore has a cash surplus of 9.0% in terms of GDP in 2012, indicating a healthy economic phenomenon, but in 2013, the cash surplus n reached only 0.7% of GDP. Singapore's central government debt in 2012 was 115.1% of GDP and 113.6% of GDP in 2013. Singapore had exported 200.7% of GDP of goods and services in 2012, which is equivalent to 435. 8 billion dollars. 178.5% of GDP goods and services were imported into Singapore in 2012. According to this data, Singapore is very demanding when it comes to imports and exports for economic growth. Singapore's deposit interest rate in 2012 is 0.1% and the loan interest rate is 5.4%. In Singapore, investing is better than putting money in the bank due to the low interest rate. Singapore's inflation rate based on consumer prices is 4.5% and 2.4% for the years 2012 and 2013 respectively..