New Zealand dollar

The New Zealand dollar (ISO 4217: NZD, sometimes NZ$ and often informally known as the Kiwi dollar) is the official currency of New Zealand, the Cook Islands, Niue, Tokelau, and the Pitcairn Islands. It was introduced in 1967 to replace the New Zealand pound, when the country decimalised its currency.

The NZD, like the United States Dollar, is made up of 100 cents.

As of January 6, 2005, 1 US dollar was worth 1.42817 NZ dollars, 1 Euro was worth 1.88420 NZ dollars, and 1 Australian dollar was worth 1.08830 NZ dollars.

Denominations

Notes

One and two dollar notes were phased out in 1991 with the introduction of the one and two dollar coins.

Coins

The sizes of the "silver" coins follow the pre-decimalisation sizes of British coins. The 50c coin replaced the crown, the 20c the florin, the 10c the shilling and the 5c the sixpenny. This same conversion was used in Australian coinage.

Due to the fact that many countries around the world use a British-derived coinage system, many Australian, Fijian and Singaporean coins are in daily circulation in New Zealand (although not being official legal tender). In the case of Austalian coins the obverse side is almost the same as New Zealand coins, and a large number of 5, 10, and 20 cent Australian coins are used in New Zealand in an identical manner to their true counterparts. It is of note that the United Kingdom itself has been phasing out these sizes of coins, and there has been the odd case of a British fivepence or tenpence appearing in a customer's change.

Shown below are the reverse designs.

Coins and Notes

Lack of 1 and 2 cent coins

The lack of one and two cent coins means that cash transactions are rounded to the (normally) nearest five cents. Some larger retailers (notably, one supermarket chain), in the interests of public relations, elected to always round down (so that $4.99 becomes $4.95 instead of $5.00). Alternatively many retailers rounded their prices to five cents to avoid the issue entirely - so a New Zealand shopper often encounters products for sale at prices like $4.95; and virtually all retailers accept electronic transactions though the EFTPOS system.

Polymer banknotes

Upcoming Changes

1. The 5c coin is now worth less than half what a cent was worth back in 1967, when New Zealand decimalised its currency.
2. Surveys had found that the 50, 20 and 10 cent coins were too large and could not be easily carried in large quantities. The current 50 cent coin is the largest coin (maybe except for the Australian 50 cent) in circulation worldwide.
3. The size of the ten-cent piece is too close to that of the dollar - in fact, so close that if you put two 10-cent pieces in a parking meter together, you could get a dollar's worth of parking time. This trick has worked, but sometimes, the coins can jam the meter if you're not lucky.

Timeline of value

• July 10, 1967 - December 23, 1971: The dollar's value was linked to British sterling.
• December 23, 1971 - July 9, 1973: The dollar's value was linked to the United States dollar.
• July 9, 1973 - March 4, 1985: The dollar's value was determined from a trade-weighted basket of currencies.
• March 4, 1985 - present day: The dollar's value was determined by the financial markets, and is in the range of about 0.40 - 0.74 United States dollars, with a particularly low valuation during 2001, and particularily high during early 2005, mainly due to the drop in value of the US dollar.
  

  External links

• Exchange rate regime - http://intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=35
• NZ dollar vs US dollar (NBNZ) - http://www.nbnz.co.nz/economics/exchange/nzdusd.htm

• Reserve Bank of New Zealand website The organisation responsible for the New Zealand currency.