New Zealand's official currency is the New Zealand dollar, with each unit divided into 100 cents.
Banknotes in New Zealand are available in denominations of 5, 10, 20, 40, and 100 dollars. Additionally, there are 1 and 2 dollar coins in circulation.
As for cents, coins are minted in values of 10, 20, and 50.
Currency of New Zealand: name, code, symbol
The currency of New Zealand is the New Zealand Dollar (NZD). Its code is NZD, and its symbol is "$" or "NZ$".
What was the first currency in New Zealand?
The pound (symbol £, £NZ for distinction) served as New Zealand's currency from 1840 until 1967, when it was succeeded by the New Zealand dollar. Similar to the pound sterling, it was divided into 20 shillings (abbreviated as "s" or "/"), each comprised of 12 pence (symbol "d").
Historically, prior to the First World War, the New Zealand pound maintained parity with the pound sterling.
During the Great Depression in the early 1930s, the New Zealand agricultural export market to the UK suffered, leading Australian banks, which controlled New Zealand's exchanges with London, to devalue the New Zealand pound in 1933. The exchange rate shifted from parity (£NZ 1 = £1 sterling) to £NZ 1 = 16 shillings sterling (£0.8). In 1948, it returned to parity with sterling, equating to £NZ 1 = £1 sterling.
In 1967, New Zealand underwent decimalization, replacing the pound with the dollar at a conversion rate of $NZ 2 = £NZ 1 (or $NZ 1 = 10 shillings NZ). Subsequently, in November of the same year, the British government devalued sterling from £1 sterling = US$2.80 to US$2.40. Simultaneously, the New Zealand dollar underwent a more significant devaluation, shifting from $NZ 1 = US$1.40 to US$1.12, aligning with the value of the Australian dollar.
Currency in New Zealand: history
Before the introduction of the New Zealand dollar in 1967, the currency in use was the New Zealand pound, distinct from the pound sterling since 1933. The pound operated on the £sd system, with 20 shillings in a pound and 12 pence in a shilling, a system considered complicated by the 1950s.
The transition to decimal currency had been under consideration since the 1930s, gaining traction in the 1950s. A committee was established in 1957 to explore decimal currency, and in 1963, the decision was made to decimalize New Zealand currency. The Decimal Currency Act of 1964 set the transition date for 10 July 1967. To avoid confusion with the term "dollar," suggestions like "fern," "kiwi," and "zeal" were proposed, but ultimately "dollar" was chosen. A character named "Mr. Dollar" became the symbol of the transition in an extensive publicity campaign.
On Decimal Currency Day, 10 July 1967, the New Zealand dollar replaced the pound at a rate of two dollars to one pound. The $1 and $2 notes were later replaced by coins in 1991.
Initially, the New Zealand dollar was pegged to both the British pound sterling and the U.S. dollar at NZ$1 = UK£1⁄2 = US$1.40. However, on 21 November 1967, the British pound was devalued, and the New Zealand dollar was devalued even further to match the Australian dollar.
In 1971, the U.S. devalued its dollar relative to gold, leading New Zealand to peg its dollar at US$1.216. From 1973 to 1985, the dollar's value was determined by a trade-weighted basket of currencies. It was floated on 4 March 1985, initially at US$0.4444. Since then, its value has fluctuated in the range of about US$0.39 to 0.88.
The New Zealand dollar is one of the 10 most-traded currencies. The Reserve Bank's intervention in 2007, selling New Zealand dollars to curb its value, marked the first such intervention since the currency was floated in 1985. Subsequent interventions were less successful. The NZ dollar reached a record high in 2008, followed by a decline in response to the global economic downturn, hitting a low point in March 2009. The currency rebounded strongly later in 2009.
As of early June 2017, the NZD traded at approximately US$0.71, and by early November 2019, it was valued at US$0.63 = NZ$1.