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New Zealand dollar
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The New Zealand dollar (sign: $; code: NZD) is the currency of New Zealand. It also circulates in the Cook Islands (see also Cook Islands dollar), Niue, Tokelau, and the Pitcairn Islands. The New Zealand Dollar is divided into 100 cents.
It is normally written with the dollar sign $, or alternatively NZ$ to distinguish it from other dollar-denominated currencies. It is often informally known as the "Kiwi (dollar)", from the word Kiwi typically being associated with New Zealand, and the fact the $1 coin depicts a kiwi.
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Encyclopedia
The New Zealand dollar (sign: $; code: NZD) is the currency of New Zealand. It also circulates in the Cook Islands (see also Cook Islands dollar), Niue, Tokelau, and the Pitcairn Islands. The New Zealand Dollar is divided into 100 cents.
It is normally written with the dollar sign $, or alternatively NZ$ to distinguish it from other dollar-denominated currencies. It is often informally known as the "Kiwi (dollar)", from the word Kiwi typically being associated with New Zealand, and the fact the $1 coin depicts a kiwi. It is one of the 12 most-traded currencies in the world.
History
On 10 July 1967, the dollar replaced the New Zealand pound at a rate of 2 dollars = 1 pound when the country decimalised its currency. The NZ$1 was initially pegged to the US dollar at a rate of US$1.39 = NZ$1. This rate changed on November 21 of the same year to US$1.12 = NZ$1 after the devaluation of the British pound (see Bretton Woods system), although New Zealand devalued more than the U.K.
In 1971, the U.S. devalued its dollar relative to gold, leading New Zealand to peg its dollar at a value of US$1.216 with a 4.5% fluctuation range on 23 December (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. The New Zealand dollar was floated on 4 March 1985 at 0.4444 USD, and since then, the dollar's value has been determined by the financial markets, and has been in the range of about 0.39–0.82 United States dollars. The dollar's post-float minimum average daily value was 0.3922 U.S. dollars on 22 November 2000, and it set a post-float maximum on 27 February 2008, reaching 0.8213 USD. Much of this medium-term variation in the exchange rate has been attributed to differences in interest rates. The New Zealand dollar's value is often strongly affected by currency trading, and is among the 12 most traded currencies.
On 11 June 2007, the Reserve Bank sold an unidentified amount of New Zealand dollars 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, however they were not as successful as the first: the first appeared to be initially effective: the dollar dropped to approximately 0.7490 U.S. dollars from near 0.7620 U.S. dollars. Within a little more than a month, however, it had risen to new post-float highs; reaching 0.8103 U.S. dollars on the 23 July 2007.
Coins
History
In 1967, coins were introduced for 1, 2, 5, 10, 20 and 50 cents. The 1 and 2 cent coins were minted in bronze, with the other denominations in cupro-nickel. The 5, 10 and 20 cents were the same size as the earlier, equivalent 6 pence, 1 shilling and 1 florin. Indeed, until 1970, the 10 cents coin bore the additional legend "One Shilling". The obverse designs of all the coins featured Arnold Machin's portrait of Elizabeth II, with the legend ELIZABETH II NEW ZEALAND [date]. The reverse sides of coins introduced in 1967 did not follow the designs that were originally intended for them. Those modern art and sculpture 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's new portrait of the Queen on all its coins. The 1 and 2 cent coins were last minted for circulation in 1987, with collector coins being made for 1988. The coins were demonetised on 1 May 1990. The lack of 1 and 2 cent coins meant that cash transactions were normally rounded to the nearest 5 cents (10 cents as of 2006), a process known as Swedish rounding. Some larger retailers (notably one supermarket chain), in the interests of public relations, elected to round the total price down (so that $4.99 became $4.95 instead of $5.00). Alternatively, many retailers rounded all their prices to the nearest 5 cents to avoid the issue entirely — so a New Zealand shopper often encountered products for sale at prices like $4.95.
In 1990, aluminium-bronze 1 and 2 dollar coins were introduced to replace existing $1 and $2 notes. In 1999, Ian Rank-Broadley'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 5¢ coin out of circulation and to make the existing 50, 20 and 10 cent 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 it would go ahead with the proposed changes. The changeover period started on 31 July 2006, with the old coins usable up until 31 October 2006. The older 50, 20, 10 and 5 cent pieces are now no longer legal tender, 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) 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.
Current circulating coins
| Image | Value | Technical Parameters | Description | Date of issue |
|---|
| Obverse | Reverse | Edge | Diameter | Thickness | Mass | Composition | Edge | Obverse | Reverse |
|---|
| | | | 10c | 20.50 mm | 1.58 mm | 3.30 g | Copper-plated steel | Plain | Queen Elizabeth II | A Maori koruru, or carved head. | 31 July 2006 | | | | | 20c | 21.75 mm | 1.56 mm | 4.00 g | Nickel-plated steel | "Spanish Flower" | Queen Elizabeth II | Maori carving of Pukaki, a chief of the Ngati Whakaue iwi | 31 July 2006 | | | | | 50c | 24.75 mm | 1.70 mm | 5.00 g | Plain | HM Bark Endeavour and Mount Taranaki | | | | | $1 | 23.00 mm | 2.74 mm | 8 g | Aluminium bronze | Intermittent milling | Queen Elizabeth II | Kiwi and Silver Fern | 11 February 1991 | | | | | $2 | 26.50 mm | 2.70 mm | 10 g | Grooved | Kotuku (Great Egret) | | |
Banknotes
In 1967, notes were introduced by the Reserve Bank of New Zealand in denominations of 1, 2, 5, 10, 20 and 100 dollars. 50 dollar notes were added in 1983, whilst 1 and 2 dollar notes were discontinued in 1991. The first two series of notes (1967-81 and 1981-92) differed only in the portrait of the Queen featured on the obverse. The reverses all depicted native birds and plants.
A new series of notes was introduced from 1992. Except for the 20 dollar note, the portrait of the Queen was dropped. However, when held up to the light an image of the Queen is visible on all notes.
Current circulating banknotes
History of NZD foreign exchange rates
With the breakdown of the Bretton Woods system in 1971, both Australia and NZ converted the mostly-fixed foreign exchange regimes to a moving peg against the U.S. dollar.
In September 1974, Australia moved to a peg against a basket of currencies called the trade weighted index (TWI) in an effort to reduce fluctuations associated with its peg to the U.S. dollar.
The peg to the TWI was changed to a moving peg in November 1976, causing the actual value of the peg to be periodically adjusted.
Since the late 1990s, and certainly since the end of the Cold War the US dollar has had less and less overall influence over the value of both the NZD and AUD against other currencies. This is somewhat evident in the above graph, but would be more obvious if the Canadian Dollar were used in the comparison.
See also
External links
- - History of the regulation surrounding the NZ$ exchange rate
- - View the current exchange rate graphs of NZ$/inr
- - Information about changes to coins from 31 July 2006.
- - Money issuing Authority
- - Old extremely rare banknotes of New Zealand
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