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Irish pound

Irish pound

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The Irish pound was the currency
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...

 of Ireland
Republic of Ireland
Ireland , described as the Republic of Ireland , is a sovereign state in Europe occupying approximately five-sixths of the island of the same name. Its capital is Dublin. Ireland, which had a population of 4.58 million in 2011, is a constitutional republic governed as a parliamentary democracy,...

 until 2002. Its ISO 4217
ISO 4217
ISO 4217 is a standard published by the International Standards Organization, which delineates currency designators, country codes , and references to minor units in three tables:* Table A.1 – Current currency & funds code list...

 code was IEP, and the usual notation was the prefix £ (or IR£ where confusion might have arisen with the pound sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...

 or other pounds
Pound (currency)
The pound is a unit of currency in some nations. The term originated in England as the value of a pound of silver.The word pound is the English translation of the Latin word libra, which was the unit of account of the Roman Empire...

). The Irish pound was superseded by the euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...

 on 1 January 1999, when the Irish pound legally became a subdivision of the euro; euro currency did not begin circulation until the beginning of 2002.

First pound


The earliest Irish coinage was introduced in 997 with the pound divided into 20 shilling
Shilling
The shilling is a unit of currency used in some current and former British Commonwealth countries. The word shilling comes from scilling, an accounting term that dates back to Anglo-Saxon times where it was deemed to be the value of a cow in Kent or a sheep elsewhere. The word is thought to derive...

s, each of 12 pence
Penny
A penny is a coin or a type of currency used in several English-speaking countries. It is often the smallest denomination within a currency system.-Etymology:...

. After a period of debasement, equivalence to sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...

 was reestablished in the 1180s. However, from 1460, issues were made with different metal contents to those of England and the values of the two currencies diverged. During the Civil War, 1689–1691, James II
James II of England
James II & VII was King of England and King of Ireland as James II and King of Scotland as James VII, from 6 February 1685. He was the last Catholic monarch to reign over the Kingdoms of England, Scotland, and Ireland...

 issued an emergency, base-metal coinage known as Gun money
Gun money
Gun money was an issue of coins made by the forces of James II during the Williamite War in Ireland between 1689 and 1691. Minted in base metal, these were designed to be redeemed for silver coins following a victory by James II and consequently bore the date in months to allow a gradual replacement...

.

In 1701, the relationship between the Irish pound and sterling was fixed at 13 Irish pounds = 12 pounds sterling. This led to a situation where Irish copper coins circulated with British silver coins, since 13 pence Irish = 1 British shilling. The only 19th century exceptions were silver tokens denominated in pence Irish issued by the Bank of Ireland
Bank of Ireland
The Bank of Ireland is a commercial bank operation in Ireland, which is one of the 'Big Four' in both parts of the island.Historically the premier banking organisation in Ireland, the Bank occupies a unique position in Irish banking history...

 between 1804 and 1813. The last Irish copper pennies and halfpennies were minted in 1823. The distinct Irish pound existed until January 1826 when it was replaced by British currency. Irish banks continued to issue paper money denominated in sterling after 1826 but no further distinct coins were issued.

Saorstát pound


A new pound was introduced in 1928, although monetary union with sterling was maintained. This new Irish pound was initially known as the Saorstát pound ("Free State
Irish Free State
The Irish Free State was the state established as a Dominion on 6 December 1922 under the Anglo-Irish Treaty, signed by the British government and Irish representatives exactly twelve months beforehand...

 pound") and was pegged to the pound sterling. As with sterling, the £sd
£sd
£sd was the popular name for the pre-decimal currencies used in the Kingdom of England, later the United Kingdom, and ultimately in much of the British Empire...

 system was used, with the Irish names punt (plural: puint), scilling (plural: scillingí) and pingin (plural: pinginí). Distinctive coins and notes
Banknotes of the Republic of Ireland
The Irish Free State, subsequently known as Ireland, resolved in the mid-1920s to design its own coins and banknotes; at the time of the currency's first issue, the Free State government decided to peg its value to the pound sterling...

 were introduced. However, the pound sterling continued to be accepted on a one-for-one basis everywhere.

Irish pound


From 1938, the means of tender was referred to as the Irish pound, after the Constitution of Ireland
Constitution of Ireland
The Constitution of Ireland is the fundamental law of the Irish state. The constitution falls broadly within the liberal democratic tradition. It establishes an independent state based on a system of representative democracy and guarantees certain fundamental rights, along with a popularly elected...

 changed the state's name. The Currency Act, 1927, Adaptation Order, 1938 was the actual mechanism by which change took place.

Decimalisation


Decimalisation
Decimalisation
Decimal currency is the term used to describe any currency that is based on one basic unit of currency and a sub-unit which is a power of 10, most commonly 100....

 of the currency was discussed during the 1960s. When the British government decided to decimalise its currency the Irish government followed suit. The legislative basis for decimalisation in the Republic was the Decimal Currency Act, 1969. The number of pence in the Irish pound was redefined from 240 to 100, with the penny symbol changing from "d" to "p". The pound itself was not revalued by this act and therefore pound banknotes were unaffected, although the 10 shilling note was replaced by the 50p coin. New coins were issued of the same dimensions and materials as the corresponding new British coins. The Decimal Currency Act, 1970 made additional provisions for the changeover not related with the issue of coins.

Decimalisation was overseen by the Irish Decimal Currency Board, created on 12 June 1968. It provided changeover information to the public including a pamphlet called Everyone's Guide to Decimal Currency. The changeover occurred on Decimal Day
Decimal Day
Decimal Day was the day the United Kingdom and Ireland decimalised their currencies.-Old system:Under the old currency of pounds, shillings and pence, the pound was made up of 240 pence , with 12 pence in a shilling and 20 shillings in a...

, 15 February 1971.

Breaking the link with sterling


In the 1970s, the European Monetary System
European Monetary System
There are three stages of monetary cooperation in the European Union.-Background:European currency exchange rate stability has been one of the most important objectives of European policy makers at least since the Second World War....

 was introduced. Ireland decided to join it in 1978, while the United Kingdom stayed out.

The European Exchange Rate Mechanism
European Exchange Rate Mechanism
The European Exchange Rate Mechanism, ERM, was a system introduced by the European Community in March 1979, as part of the European Monetary System , to reduce exchange rate variability and achieve monetary stability in Europe, in preparation for Economic and Monetary Union and the introduction of...

 finally broke the one-for-one link that existed between the Irish pound and the pound sterling; by 30 March 1979 the parity link between the two currencies was broken and an exchange rate
Exchange rate
In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...

 was introduced.

This period also saw the creation of the Currency Centre
Currency Centre
The Currency Centre is the mint of coins and printer of banknotes for the Central Bank of Ireland, including the euro currency. The centre is located at Sandyford, Dublin, Ireland. The centre does not print the complete range of euro banknotes...

 at Sandyford
Sandyford
Sandyford is a suburb of Dublin, located in Dún Laoghaire-Rathdown County, Ireland. A major part of Sandyford today is composed of the Sandyford Industrial Estate and related developments.- Location and access :...

 in 1978 so that banknotes and coinage could be manufactured within the state. Prior to this banknotes were printed by specialist commercial printers in England, and coins by the Royal Mint
Royal Mint
The Royal Mint is the body permitted to manufacture, or mint, coins in the United Kingdom. The Mint originated over 1,100 years ago, but since 2009 it operates as Royal Mint Ltd, a company which has an exclusive contract with HM Treasury to supply all coinage for the UK...

.

1979–1999: Independence


"During the twenty years of the EMS the Irish pound fluctuated widely against sterling, going below 74 pence (February 1981) and as high as 110 pence (November 1992). Nor was it stable against EMS partner currencies. Realignments in the EMS were fairly frequent, averaging about one a year in the 1980s, and the Irish pound depreciated steadily against the Deutsche Mark (DEM), anchor of the system, reaching a cumulative depreciation of 34 percent at its low point in 1993. These depreciations both reflected wider weaknesses in the Irish economy in those years and served to prevent a loss of competitiveness from compounding those weaknesses. Thus, contrary to the fears of many observers, linking the currency with the Mark did not impose an unsupportable discipline, largely because the option of depreciation was readily availed of".

Until 1986, all decimal Irish coins were the same shape and size as their UK counterparts. After this, however, all new denominations or redesigned coins were of different sizes to the UK coinage. The new 20p and £1 coins were completely different in size, shape and composition to the previously introduced UK versions. When the UK 5p and 10p coins were reduced in size, the Irish followed suit but with the new Irish 10p smaller than the new UK version and the new Irish 5p slightly bigger than the UK version. The Irish 50p was never reduced in size (as in the UK).

Replacement with the euro


On 31 December 1998, the exchange rates between the European Currency Unit
European Currency Unit
The European Currency Unit was a basket of the currencies of the European Community member states, used as the unit of account of the European Community before being replaced by the euro on 1 January 1999, at parity. The ECU itself replaced the European Unit of Account, also at parity, on 13...

  and the Irish pound and 10 other EMS currencies (all but the pound sterling, the Swedish krona and the Danish krone) were fixed. The fixed conversion factor for the Irish pound was € 1 = IR£ 0.787564. On the next day, a virtual euro was introduced and the exchange rate was GB£ 1 = € 1.42210, making GB£ 1 ≈ IR£ 1.12. By 1 January 2002, the day when the physical euro was introduced, GB£1 was worth about IR£ 1.287. Following the appreciation of the euro since its launch and the fall of Sterling in 2007-2009, as of April 2010, GB£ 1 was worth about the equivalent of IR£ 0.91.

Although the euro became the currency of the eurozone
Eurozone
The eurozone , officially called the euro area, is an economic and monetary union of seventeen European Union member states that have adopted the euro as their common currency and sole legal tender...

 countries including Ireland on 1 January 1999, it was not until 1 January 2002 that the state began to withdraw Irish pound coins and notes, replacing them with euro specie. All other eurozone countries withdrew their currencies in a similar fashion, from that date. Irish pound coins and notes ceased to be legal tender on 9 February 2002, although they are intended to be exchangeable indefinitely for euro at the Central Bank
Central Bank and Financial Services Authority of Ireland
The Central Bank of Ireland is the financial services regulator of Ireland and historically the central bank. The bank was the issuer of Irish pound banknotes and coinage until the introduction of the euro currency, and now provides this service for the European Central Bank.The bank was founded...

.

On 31 December 2001, the total value of Irish banknotes in circulation was €4,343.8 million, and the total value of Irish coins was €387.9 million. The Irish cash changeover was one of the fastest in the eurozone
Eurozone
The eurozone , officially called the euro area, is an economic and monetary union of seventeen European Union member states that have adopted the euro as their common currency and sole legal tender...

, with some shops illegally ceasing to accept pounds after the first week or two. With a conversion factor of 0.787564 Irish pounds to the euro, 56%, by value, of Irish banknotes was withdrawn from circulation within two weeks of the introduction of euro banknotes and coins, and 83.4% by the time they ceased to have legal tender status.

Withdrawal of coinage was slower, having a lower priority, with only 45% of coins withdrawn by 9 February 2002.

All Irish coins and banknotes, from the start of the Irish Free State onwards, both decimal and pre-decimal, may be exchanged for euro at the Central Bank in Dublin.

Hidden inflation


When decimal currency and the euro were in turn introduced, many people in Ireland believed that prices had been improperly raised by traders taking advantage of the confusion, exchange rates notwithstanding.

In the case of the euro the government took special measures to try to prevent any unnecessary price changes, which ultimately proved ineffective. The changeover coincided with an economic boom in the country, and inflation was moderately high. People were eager to blame price rises on merchants taking advantage of changeover confusion.

Most retailers, especially the larger chains, continued to show prices in Irish pounds under the euro price for up to 5 years after the changeover, enabling people to see the price in old currency and check whether prices had been improperly inflated.

See also


  • Banknotes of the Republic of Ireland
    Banknotes of the Republic of Ireland
    The Irish Free State, subsequently known as Ireland, resolved in the mid-1920s to design its own coins and banknotes; at the time of the currency's first issue, the Free State government decided to peg its value to the pound sterling...

  • Coins of the Republic of Ireland
    Coins of the Republic of Ireland
    The Irish Free State decided soon after its foundation in the 1920s to design its own coins and banknotes. It was decided that the Irish currency would be pegged to the pound sterling...

  • Commemorative coins of Ireland
    Commemorative coins of Ireland
    Various commerative coins denominated in Irish currency were issued up until 2002, when the Irish pound came to an end and was superseded by the euro. Since then there have been Irish commerative coins denominated in euro.-10 Shilling:-50p:...

  • Irish euro coins
    Irish euro coins
    Irish euro coins all share the same design by Jarlath Hayes, that of the harp, a traditional symbol for Ireland since the Middle Ages, based on that of the Brian Boru harp, housed in Trinity College, Dublin. The same harp is used as the official seals of the Taoiseach, and government ministers and...

  • Economy of the Republic of Ireland
    Economy of the Republic of Ireland
    The economy of Ireland has transformed in recent years from an agricultural focus to a modern knowledge economy, focusing on services and high-tech industries and dependent on trade, industry and investment. In terms of GDP per capita, Ireland is ranked as one of the wealthiest countries in the...


External links


  1. 1999 by law, 2002 de facto.