New Zealand dollar

New Zealand dollar
New Zealand dollar ( English)
Tāra o Aotearoa ( Māori)
NZ Dollar Five.png NZ one dollar reverse.jpg
$5 banknote obverse $1 coin reverse
ISO 4217
Code NZD
Number 554
Exponent 2
Denominations
Subunit
 1/100 cent
Symbol $
cent c
Nickname kiwi
Banknotes $5, $10, $20, $50, $100
Coins 10c, 20c, 50c, $1, $2
Demographics
User(s)

  New Zealand

Issuance
Central bank Reserve Bank of New Zealand
 Website www.rbnz.govt.nz
Printer Note Printing Australia (provides base polymer note material)
 Website www.noteprinting.com
Valuation
Inflation 0.2% (New Zealand only)
 Source Reserve Bank of New Zealand, November 2016
Pegged by Cook Islands dollar, Niue dollar and Pitcairn Islands dollar (all at par)

The New Zealand dollar ( sign: $; code: NZD) ( Māori: Tāra o Aotearoa) is the currency and legal tender of New Zealand, the Cook Islands, Niue, the Ross Dependency, Tokelau, and a British territory, the Pitcairn Islands. [1] Within New Zealand, it is almost always abbreviated with the dollar sign ($), with "NZ$" sometimes used to distinguish it from other dollar-denominated currencies. In the context of currency trading, it is often informally called the "Kiwi", [2] since New Zealand is commonly associated with the indigenous bird and the one-dollar coin depicts a kiwi.

Introduced in 1967, the dollar is subdivided into 100 cents. Altogether there are ten denominations—five coins and five banknotes—with the smallest being the 10-cent coin. Formerly there were lower denominations, but those were discontinued due to inflation and production costs.

The New Zealand dollar is consistently one of the 10 most-traded currencies in the world, being approximately 2.0% of global foreign exchange market daily turnover in 2013. [3]

History

Introduction

Prior to the introduction of the New Zealand dollar in 1967, the New Zealand pound was the currency of New Zealand, which had been distinct from the pound sterling since 1933. The pound used the £sd system, in which the pound was divided into 20 shillings and one shilling was divided into 12 pence, which by the 1950s was considered complicated and cumbersome.

Switching to decimal currency had been proposed in New Zealand since the 1930s, although only in the 1950s did any plans come to fruition. In 1957, a committee was set up by the Government to investigate decimal currency. The idea fell on fertile ground, and in 1963, the Government decided to decimalise New Zealand currency. [4] The Decimal Currency Act was passed in 1964, setting the date of transition to 10 July 1967. [5] Words such as "fern", "kiwi" and "zeal" were proposed to avoid confusion with the word "dollar", which many people at the time associated with the United States dollar. [6] [7] In the end, the word "dollar" was chosen anyway, and an anthropomorphic dollar note cartoon character called "Mr. Dollar" became the symbol of transition in a huge publicity campaign. [8]

On Monday 10 July 1967 ("Decimal Currency Day"), the New Zealand dollar was introduced to replace the pound at a rate of two dollars to one pound (one dollar to ten shillings, ten cents to one shilling, 56 cent to a penny). [9] Some 27 million new banknotes were printed and 165 million new coins were minted for the changeover. [6]

Exchange rate

The New Zealand dollar was initially pegged to the US dollar at US$1.43 = NZ$1. This rate changed on 21 November 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 UK. [10]

In 1971 the US devalued its dollar relative to gold, leading New Zealand on 23 December to peg its dollar at US$1.216 with a 4.5% fluctuation range, 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 NZ$ was floated on 4 March 1985 at the initial rate of US$0.4444. Since then the dollar's value has been determined by the financial markets, and has been in the range of about US$0.39 to 0.88.

The dollar's post-float low was US$0.3922 on 22 November 2000, and it reached a post-float high on 9 July 2014 of US$0.8821. Much of this medium-term variation in the exchange rate has been attributed to differences in interest rates.[ citation needed]

The New Zealand dollar's value is often strongly affected by currency trading,[ citation needed] and is among the 10 most-traded currencies. [11]

On 11 June 2007 the Reserve Bank sold an unknown worth of New Zealand dollars for nine billion USD 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, but they were not as successful as the first: the first appeared to be initially effective, with the dollar dropping to approximately US$0.7490 from near US$0.7620. However, within little more than a month it had risen to new post-float highs, reaching US$0.8103 on 23 July 2007.

After reaching its post-float record high in early 2008, the value of the NZ$ plummeted throughout much of the 2nd half of 2008 and the first quarter of 2009 as a response to the global economic downturn and flight by investors away from "riskier" currencies such as the NZ$. The NZ$ bottomed out at approximately US$0.50 on 6 March 2009. [12] However, it rebounded strongly as the year progressed, reaching the US$0.75 range by November 2009. [12]

By late 2012, the dollar was holding above 80 US cents, occasionally reaching 85c, prompting calls from the Green Party for quantitative easing. [13] [14] Unions also called on the Government and the Reserve Bank to take action, but as of February 2013 both had declined. [15]

As of early June, 2017, the NZD was trading at approximately US$0.71. [16]

Other Languages
Bân-lâm-gú: New Zealand dollar
беларуская (тарашкевіца)‎: Новазэляндзкі даляр
বিষ্ণুপ্রিয়া মণিপুরী: নিউজিল্যান্ড ডলার
Bahasa Indonesia: Dolar Selandia Baru
Māori: Tāra
Bahasa Melayu: Dolar New Zealand
Norfuk / Pitkern: Nyuu Ziilan dola
norsk nynorsk: Newzealandsk dollar
Simple English: New Zealand Dollar
srpskohrvatski / српскохрватски: Novozelandski dolar
Tiếng Việt: Đô la New Zealand
粵語: 紐西蘭元
中文: 紐西蘭元