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The New Zealand dollar ( mi, tāra o Aotearoa;
sign A sign is an Physical object, object, quality (philosophy), quality, event, or Non-physical entity, entity whose presence or occurrence indicates the probable presence or occurrence of something else. A natural sign bears a causal relation to ...
: $, NZ$;
code In communications and information processing, code is a system of rules to convert information—such as a letter (alphabet), letter, word, sound, image, or gesture—into another form, sometimes data compression, shortened or secrecy, secret ...
: NZD) is the official
currency A currency, "in circulation", from la, Wikt:currens, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or currency in circulation, circulation as a medium of exchange, for example ba ...
and
legal tender Legal tender is a form of money that Standard of deferred payment, courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which wh ...
of
New Zealand New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 List of islands of New Zealand, smaller islands. It is the ...
, the
Cook Islands ) , image_map = Cook Islands on the globe (small islands magnified) (Polynesia centered).svg , capital = Avarua , coordinates = , largest_city = Avarua , official_languages = , langu ...
,
Niue Niue (, ; niu, Niuē) is an island country in the South Pacific Ocean, northeast of New Zealand. Niue's land area is about and its population, predominantly Polynesians, Polynesian, was about 1,600 in 2016. Niue is located in a triangle b ...
, the
Ross Dependency The Ross Dependency is a region of Antarctica defined by a circular sector, sector originating at the South Pole, passing along longitudes 160th meridian east, 160° east to 150th meridian west, 150° west, and terminating at latitude 60th para ...
,
Tokelau Tokelau (; ; known previously as the Union Islands, and, until 1976, known officially as the Tokelau Islands) is a dependent territory of New Zealand in the southern Pacific Ocean. It consists of three tropical coral atolls: Atafu, Nukunonu, a ...
, and a British territory, the
Pitcairn Islands The Pitcairn Islands (; Pitkern: '), officially the Pitcairn, Henderson, Ducie and Oeno Islands, is a group of four volcanic islands in the southern Pacific Ocean The Pacific Ocean is the largest and deepest of Earth's five oceani ...
. Within New Zealand, it is almost always abbreviated with the
dollar sign The dollar sign, also known as peso sign, is a symbol consisting of a upper case, capital "S" crossed with one or two vertical strokes ($ or ), used to indicate the unit of various currency, currencies around the world, including most curren ...
($). "$NZ" or "NZ$" are sometimes used when necessary to distinguish it from other
dollar Dollar is the name of more than 20 Currency, currencies. They include the Australian dollar, Brunei dollar, Canadian dollar, Hong Kong dollar, Jamaican dollar, Liberian dollar, Namibian dollar, New Taiwan dollar, New Zealand dollar, Singapore d ...
-denominated currencies. Introduced in 1967, the dollar is subdivided into 100 cents. Altogether it has five coins and five banknotes with the smallest being the 10-cent coin; smaller denominations have been discontinued due to inflation and production costs. In the context of currency trading, the New Zealand dollar is sometimes informally called the "Kiwi" or "Kiwi dollar", since the
flightless bird Flightless birds are birds that through evolution lost the ability to Bird flight, fly. There are over 60 extant species, including the well known ratites (ostriches, emu, cassowary, cassowaries, Rhea (bird), rheas, and Kiwi (bird), kiwi) and ...
, the
kiwi Kiwi most commonly refers to: * Kiwi (bird) Kiwi ( ) are flightless birds endemism, endemic to New Zealand of the order Apterygiformes. The five extant species fall into the family Apterygidae () and genus ''Apteryx'' (). Approximately the ...
, is depicted on its one-dollar coin. It is the tenth most traded currency in the world, representing 2.1% of global foreign exchange market daily turnover in 2019.


History


Introduction

Prior to the introduction of the New Zealand dollar in 1967, the
New Zealand pound The pound (symbol £, £NZ. for distinction) was the currency of New Zealand New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Is ...
was the currency of New Zealand, which had been distinct from the
pound sterling Sterling (abbreviation: stg; Other spelling styles, such as STG and Stg, are also seen. ISO code: GBP) is the currency of the United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United King ...
since 1933. The pound used the
£sd £sd (occasionally written Lsd, spoken as "pounds, shillings and pence" or pronounced ) is the popular name for the pre-decimal currencies once common throughout Europe, especially in the British Isles The British Isles are a group ...
system, in which the pound was divided into 20 shillings and one shilling was divided into 12 pence, a system which by the 1950s was considered complicated and cumbersome. Switching to decimal currency had been proposed in New Zealand since the 1930s, although only in the 1950s did any plans come to fruition. In 1957, a committee was set up by the Government to investigate decimal currency. The idea fell on fertile ground, and in 1963, the Government decided to decimalise New Zealand currency. The Decimal Currency Act was passed in 1964, setting the date of transition to 10 July 1967. Words such as "fern", "kiwi" and "zeal" were proposed to avoid confusion with the word "dollar", which many people associate with the
United States dollar The United States dollar (Currency symbol, symbol: Dollar sign, $; ISO 4217, code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from Dollar, other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American ...
. In the end, the word "dollar" was chosen anyway, and an
anthropomorphic Anthropomorphism is the attribution of human traits, emotions, or intentions to non-human entities. It is considered to be an innate tendency of human psychology. Personification is the related attribution of human form and characteristics t ...
dollar note cartoon character called "Mr. Dollar" became the symbol of transition in a huge publicity campaign. On Monday 10 July 1967 ("Decimal Currency Day"), the New Zealand dollar was introduced to replace the pound at a rate of two dollars to one pound (one dollar to ten shillings, ten cents to one shilling, cent to a penny). Some 27 million new banknotes were printed and 165 million new coins were minted for the changeover.


Exchange rate

The New Zealand dollar was initially pegged to both the British
pound sterling Sterling (abbreviation: stg; Other spelling styles, such as STG and Stg, are also seen. ISO code: GBP) is the currency of the United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United King ...
and the
United States dollar The United States dollar (Currency symbol, symbol: Dollar sign, $; ISO 4217, code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from Dollar, other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American ...
at NZ$1 = UK£ = US$1.40. On 21 November 1967 sterling was devalued from UK£1 = US$2.80 to US$2.40 (see
Bretton Woods system The Bretton Woods system of Monetary system, monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agree ...
), but the New Zealand dollar was devalued even more from NZ$1 = US$1.40 to US$1.12, to match the value of the
Australian dollar The Australian dollar ( sign: $; code: AUD) is the currency of Australia Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and ...
. In 1971 the US devalued its dollar relative to gold, leading New Zealand on 23 December to peg its dollar at US$1.216 with a 4.5% fluctuation range, keeping the same gold value. From 9 July 1973 to 4 March 1985 the dollar's value was determined from a trade-weighted basket of currencies. On 4 March 1985, the NZ$ was floated at the initial rate of US$0.4444. Since then the dollar's value has been determined by the financial markets, and has been in the range of about US$0.39 to 0.88. The dollar's post-float low was US$0.3922 on 22 November 2000, and it reached a post-float high on 9 July 2014 of US$0.8821. Much of this medium-term variation in the exchange rate has been attributed to differences in interest rates. The New Zealand dollar is among the 10 most-traded currencies. On 11 June 2007 the Reserve Bank sold an unknown worth of New Zealand dollars for nine billion
USD The United States dollar (Currency symbol, symbol: Dollar sign, $; ISO 4217, code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from Dollar, other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American ...
in an attempt to drive down its value. This is the first intervention in the markets by the Bank since the float in 1985. Two suspected interventions followed, but they were not as successful as the first: the first appeared to be initially effective, with the dollar dropping to approximately US$0.7490 from near US$0.7620. However, within little more than a month it had risen to new post-float highs, reaching US$0.8103 on 23 July 2007. After reaching its post-float record high in early 2008, the value of the NZ$ plummeted throughout much of the 2nd half of 2008 and the first quarter of 2009 as a response to the global economic downturn and flight by investors away from "riskier" currencies such as the NZ$. The NZ$ bottomed out at approximately US$0.50 on 6 March 2009. However, it rebounded strongly as the year progressed, reaching the US$0.75 range by November 2009. By late 2012, the dollar was holding above 80 US cents, occasionally reaching 85¢, prompting calls from the Green Party for
quantitative easing Quantitative easing (QE) is a monetary policy action whereby a central bank purchases predetermined amounts of government bonds or other financial assets in order to stimulate economic activity. Quantitative easing is a novel form of monetary pol ...
. Unions also called on the Government and the Reserve Bank to take action, but as of February 2013 both had declined. As of early June 2017, the NZD was trading at approximately US$0.71, and in early November 2019 it was valued as US$0.63 = NZ$1.


Coins


History

On the introduction of the dollar, coins came in denominations of 1c, 2c, 5c, 10c, 20c, and 50c. The 1c and 2c coins were bronze, the others were
cupro-nickel Cupronickel or copper-nickel (CuNi) is an alloy of copper that contains nickel and strengthening elements, such as iron and manganese. The copper content typically varies from 60 to 90 percent. (Monel is a nickel-copper alloy that contains a minimu ...
.History of New Zealand Coinage
, Reserve Bank of New Zealand. Accessed 4 April 2009.
To ease transition, the 5c, 10c, and 20c were the same size as the sixpence, shilling and florin that they respectively replaced, and until 1970, the ten-cent coin bore the additional legend "One Shilling". The obverse designs of all the coins featured
Arnold Machin Arnold Machin Order of the British Empire, OBE, Royal Academy, R.A., Royal Society of Sculptors, FRSS (; 30 September 1911 – 9 March 1999) was a British artist, sculptor, and coin and postage stamp designer. Life Machin was born Stoke-on-Trent ...
's portrait of
Queen Elizabeth II Elizabeth II (Elizabeth Alexandra Mary; 21 April 1926 – 8 September 2022) was Queen of the United Kingdom and other Commonwealth realms from 6 February 1952 until Death and state funeral of Elizabeth II, her death in 2022. She was queen ...
, with the legend ELIZABETH II NEW ZEALAND ate The reverse sides of coins introduced in 1967 did not follow the designs that were originally intended for them. Those
modern art Modern art includes artistic work produced during the period extending roughly from the 1860s to the 1970s, and denotes the styles and philosophies of the art produced during that era. The term is usually associated with art in which the tradi ...
and
sculpture Sculpture is the branch of the visual arts that operates in three dimensions. Sculpture is the three-dimensional art work which is physically presented in the dimensions of height, width and depth. It is one of the plastic arts. Durable sc ...
themed designs were leaked to a newspaper and met a very negative public reaction. The final releases were given more conservative designs in line with public expectations. In 1986, New Zealand adopted
Raphael Maklouf Raphael David Maklouf (born 10 December 1937) is a British sculpture, sculptor, best known for designing an effigy of Elizabeth II of the United Kingdom, Queen Elizabeth II used on the coins of many Commonwealth of Nations, Commonwealth nations ...
's new portrait of the Queen. The 1c and 2c coins were last minted for circulation in 1987, with collector coins being made for 1988. The coins were demonetised on 30 April 1990. The lack of 1c and 2c coins meant that cash transactions were normally rounded to the nearest 5c (10c from 2006), a process known as Swedish rounding. On 11 February 1991, aluminium-bronze $1 and $2 coins were introduced to replace existing $1 and $2 notes. In 1999,
Ian Rank-Broadley Ian Rank-Broadley Royal British Society of Sculptors, FRBS (born 1952) is a British sculpture, sculptor who has produced many acclaimed works, among which are several designs for British coinage and the Statue of Diana, Princess of Wales, memor ...
's portrait of the Queen was introduced and the legend rearranged to read "NEW ZEALAND ELIZABETH II". On 11 November 2004 the Reserve Bank announced that it proposed to take the 5c coin out of circulation and to make the 50c, 20c and 10c coins smaller and use plated steel to make them lighter. After a three-month public submission period that ended on 4 February 2005, the Reserve Bank announced on 31 March that it would go ahead with the proposed changes. The changeover period started on 31 July 2006, with the old coins usable until 31 October 2006. The old 50c, 20c, 10c and 5c pieces are now no longer
legal tender Legal tender is a form of money that Standard of deferred payment, courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which wh ...
, but are still redeemable at the Reserve Bank. Prior to the change over, these coins were similar, save for the legend and reverse artwork, to international (mainly
Commonwealth A commonwealth is a traditional English term for a political community founded for the common good In philosophy, economics, and political science, the common good (also commonwealth, general welfare, or public benefit) is either what is share ...
) coins of the same British-derived sizes, which led to coins from other currencies, particularly older coins, being accepted by vending machines and many retailers. On 23 March 2015, the Reserve Bank of New Zealand issued its first commemorative circulating coin to mark the centenary of the Gallipoli landings. The coin was also New Zealand's first colour circulating coin. One million coins, with a denomination of 50c, were minted. On 1 October 2018 the Reserve Bank of New Zealand issued its second commemorative circulating coin to mark the centenary of
Armistice day Armistice Day, later known as Remembrance Day in the Commonwealth and Veterans Day in the United States, is commemorated every year on 11 November to mark Armistice of 11 November 1918, the armistice signed between the Allies of World War I a ...
. The coin was also New Zealand's second colour circulating coin. Two million coins, with a denomination of 50c, were minted.


Current circulating coins


Future

After the death of Queen Elizabeth II in September 2022, the Reserve Bank said it would exhaust its existing coin stocks before introducing new coins featuring
King Charles III Charles III (Charles Philip Arthur George; born 14 November 1948) is King of the United Kingdom and the 14 other Commonwealth realms. He was the longest-serving heir apparent and Prince of Wales and, at age 73, became the oldest person to a ...
. Based on current stock levels, this would likely be several years away.


Banknotes


History

In 1967, notes were introduced in denominations of $1, $2, $5, $10, $20 and $100, with all except the $5 replacing their pound predecessors. The original series of dollar notes featured on the obverse a portrait of Queen Elizabeth II wearing
Queen Alexandra Alexandra of Denmark (Alexandra Caroline Marie Charlotte Louise Julia; 1 December 1844 – 20 November 1925) was List of British royal consorts, Queen of the United Kingdom and the British Dominions, and Empress of India, from 22 January 1901 t ...
's Kokoshnik tiara, King George's VI festoon necklace, and Queen Mary's floret earrings, while the reverse featured native birds and plants. The notes were changed slightly in 1981 due to a change of printer (from De La Rue to Bradbury, Wilkinson & Co.)—the most noticeable difference being the portrait based upon a photograph by Peter Grugeon, in which Queen Elizabeth II is wearing Grand Duchess Vladimir's tiara and Queen Victoria's golden jubilee necklace. The $50 note was added in 1983 to fill the long gap between the $20 and the $100 notes. $1 and $2 notes were discontinued in 1991 after being replaced with coins. A new series of notes, known as Series 5 was introduced in 1992. The obverse of each note featured a notable New Zealander, while the reverse featured a native New Zealand bird and New Zealand scenery. The Queen remained on the $20 note. In 1999, series 6 polymer notes replaced the paper notes. The designs remained much the same, but were changed slightly to accommodate new security features, with the most obvious changes being the two transparent windows. In 2015–16, new Series 7 notes were issued, refreshing the note design and improving security features. As of 2021, Series 6 and 7 notes are currently legal tender. In September 2022, following the death of Queen Elizabeth II, the Reserve Bank said it would exhaust its existing stocks of $20 notes before introducing new notes featuring King Charles III.


Current circulating banknotes


In foreign exchange markets


History

With the breakdown of the Bretton Woods system in 1971, both Australia and New Zealand converted the mostly-fixed foreign exchange regimes to a moving peg against the US dollar. In September 1974, Australia moved to a peg against a basket of currencies called the trade weighted index (TWI) in an effort to reduce fluctuations associated with its peg to the US dollar. The peg to the TWI was changed to a moving peg in November 1976, causing the actual value of the peg to be periodically adjusted. Since the late 1990s, and certainly since the end of the
Cold War The Cold War is a term commonly used to refer to a period of Geopolitics, geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc. The term ''Cold war (term), co ...
the US dollar has had less and less overall influence over the value of both the NZ$ and A$ against other currencies.


Current exchange rates


In currency trading

The New Zealand dollar contributes greatly to the total global exchange market—far in excess of New Zealand's relative share of population or global GDP. According to the
Bank for International Settlements The Bank for International Settlements (BIS) is an international financial institution owned by central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country ...
, the New Zealand dollar's share of global foreign exchange market daily turnover in 2016 was 2.1% (up from 1.6% in 2010) giving it a rank of 11th. g.10 of PDF/ref> Trading in the currency has climbed steadily since the same survey in 1998 when the NZD's ranking was 17th and the share of turnover was just 0.2%.


See also

*
Australian dollar The Australian dollar ( sign: $; code: AUD) is the currency of Australia Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and ...
*
Cook Islands dollar The Cook Islands dollar was the former currency of the Cook Islands, which now uses the New Zealand dollar, although some physical cash issued for the Cook Islands dollar remains in use. The dollar was subdivided into 100 ''cent (currency), cents ...
*
Economy of New Zealand The economy of New Zealand is a highly developed free-market economy. It is the 51st-largest national economy in the world when measured by nominal gross domestic product (GDP) and the List of countries by GDP (PPP), 63rd-largest in the worl ...
* History of Chatham Islands numismatics * Kauri bond *
Pitcairn Islands dollar The Pitcairn Islands is a non-sovereign British Overseas Territories, British overseas territory and the New Zealand dollar is used as exchange. The Pitcairn Islands began issuing its first commemorative coins in 1988. Though the Pitcairn Island ...
* Postal orders of New Zealand


Notes


References


External links


ANZ New Zealand
View the current exchange rate graphs of NZ$/inr
Reserve bank of New Zealand
Money issuing Authority
Historical New Zealand Trading bank notes
Old extremely rare banknotes of New Zealand
Images of historic and modern New Zealand bank notes


{{DEFAULTSORT:New Zealand Dollar Currencies of the Commonwealth of Nations Currencies of New Zealand Currencies of British Overseas Territories Dollar Currencies introduced in 1967
Dollar Dollar is the name of more than 20 Currency, currencies. They include the Australian dollar, Brunei dollar, Canadian dollar, Hong Kong dollar, Jamaican dollar, Liberian dollar, Namibian dollar, New Taiwan dollar, New Zealand dollar, Singapore d ...
Currencies of the Cook Islands