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Australian dollar
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HistoryThe dollar was introduced on 14 February 1966, replacing the duodecimal Australian pound (distinct from the pound sterling since 1929) with a decimal currency.
The royalIn 1965, the Prime Minister, Robert Menzies, wished to name the currency "the royal" and other names such as "the austral", "the oz", "the boomer", "the roo", "the kanga", "the emu", "the digger", "the kwid" and, jokingly, "the ming" (the nickname of Menzies) were also proposed. Due to Menzies' influence, the name "royal" was settled on, and trial designs were prepared and printed by the Reserve Bank of Australia. The choice of name for the currency proved unpopular, and it was later shelved in favour of "dollar".
The dollarOn 14 February 1966 the dollar was introduced at a rate of two dollars per pound, or ten shillings per dollar.
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1966 The Australian dollar is introduced at a rate of two dollars per pound, or ten shillings per dollar.
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HistoryThe dollar was introduced on 14 February 1966, replacing the duodecimal Australian pound (distinct from the pound sterling since 1929) with a decimal currency.
The royalIn 1965, the Prime Minister, Robert Menzies, wished to name the currency "the royal" and other names such as "the austral", "the oz", "the boomer", "the roo", "the kanga", "the emu", "the digger", "the kwid" and, jokingly, "the ming" (the nickname of Menzies) were also proposed. Due to Menzies' influence, the name "royal" was settled on, and trial designs were prepared and printed by the Reserve Bank of Australia. The choice of name for the currency proved unpopular, and it was later shelved in favour of "dollar".
The dollarOn 14 February 1966 the dollar was introduced at a rate of two dollars per pound, or ten shillings per dollar. At its introduction, it was pegged to sterling at a rate of 1 dollar = 8 shillings (2.5 dollars = 1 pound). In 1967, Australia effectively left the sterling area for the first time. When sterling devalued in 1967 against the U.S. dollar, the Australian dollar did not follow. It maintained its peg to the U.S. dollar at the same rate of 1 Australian dollar = 1.12 U.S. dollars.
CoinsIn 1966, coins were introduced in denominations of 1, 2, 5, 10, 20 and 50 cents. One-dollar coins were introduced in 1984, followed by two-dollar coins in 1988. The one- and two-cent coins were discontinued in 1991 and withdrawn from circulation. Cash transactions are rounded to the nearest five cents. As with most public changes to currency systems, there has been a great amount of seignorage of the discontinued coins. All coins portray the head of state, Queen Elizabeth II on the obverse, and are produced by the Royal Australian Mint.
Australia has regularly issued commemorative 50-cent coins. The first was in 1970, commemorating Captain Cook's exploration along the east coast of the Australian continent, followed in 1977 by a coin for Queen Elizabeth II's Silver Jubilee, the wedding of Charles and Diana in 1981, the Brisbane Commonwealth Games in 1982, and the Australian Bicentenary in 1988. Issues expanded into greater numbers in the 1990s and the 21st century, responding to collector demand. Australia has also made special issues of 20-cent and one-dollar coins.
There are many five-dollar coins, of aluminium/bronze and bi-metal, and many silver and gold bullion coins in higher denominations. These are not normally used in payment, although they are legal tender.
Current Australian 5-, 10- and 20-cent coins are identical in size to the former Australian, New Zealand and British sixpenny, shilling and two shilling (florin) coins. In 1990. the UK replaced these coins with smaller versions, as did New Zealand in 2006 - at the same time discontinuing the five-cent coin. With a mass of 15.55 grams and a diameter of 31.51 mm, the Australian 50-cent coin is one of the largest coins in circulation today.
Value of the Australian dollarIn 1966, when the Australian dollar was introduced, the International gold standard still operated. The dollar was at that time worth 980 mg of gold. As of February 2008 the dollar was worth 30 mg of gold.
The highest value of the Australian dollar in the first two decades after it was floated was 96.68 US cents on 18 March 1984 . The Australian dollar returned to 96.68 US cents on 30 June 2008, and subsequently rose to a new post-float high of 98.49 US cents on 15 July 2008. The lowest value of the Australian dollar after it was floated was 47.75 US cents in April 2001.
It is also currently the 14th Highest valued currency unit.
Exchange rate policiesAustralia maintained a peg to the British pound at par then at 0.8 GBP (16 shillings sterling). This reflected its historical ties as well as a view about the stability in value of the British pound. From 1946 to 1971, Australia maintained a peg to the US dollar under the Bretton Woods system, but it was effectively pegged to sterling until 1967.
With the breakdown of the Bretton Woods system in 1971, Australia converted the mostly fixed peg 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.
On 9 December 1983, the Australian Labor government led by Prime Minister Bob Hawke and Treasurer Paul Keating "floated" the Australian dollar. From that point, movements in the Australian dollar reflected the credits and debits in the balance of payments. The terms of trade does not determine the value of the dollar but it is a major component of the balance of payments.
For decades, Australia's reliance upon commodity (mineral and farm) exports has seen the Australian dollar rally during global booms, and fall when mineral prices slumped or when domestic spending overshadowed its export earnings outlook. The currency's high volatility, currency exposure and interest swap has made the AUD one of the most traded currencies in the world, far in excess of the economy's importance (2% of global economic activity).
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