Last Updated on
The New Zealand Dollar is the official currency for New Zealand. It is one of many dollar-denominated currencies in the world. Aside from New Zealand, it is also the legal tender for many other countries or territories such as the Cook Islands, Pitcairn Islands, Niue, and Tokelau. When used within the country, the New Zealand Dollar is abbreviated using the $ sign. But in the world market, the abbreviation NZ$ is used in order to distinguish it from other currencies that use the dollar denomination. When it comes to the currency trading market as well, the currency is casually referred to as Kiwi.
The New Zealand Dollar was introduced into the country as its main currency in 1967. The currency is available in 10 denominations: 5 coins and 5 banknotes. The lowest coin denomination available is a 10-cent coin. Prior to this, there were several other smaller denominations but due to the cost of production and the inflation rate that rendered some of them of little value, the New Zealand government has decided to discontinue them.
As of 2013, the inflation rate for the New Zealand Dollar is at 0.2%, which is one of the best in the world. In addition, it is also among the top 10 most traded currencies in the world. It accounts for about 2% of the foreign exchange market daily turnover.
Before the New Zealand Dollar was established as the main currency of the country, it was New Zealand Pound. This was different from Pound Sterling. The switch to a decimal currency was proposed in the 1930s but was not put into effect until the 1950s. The Decimal Currency Act was put into effect in 1964. By 1967, the transition to the decimal currency was implemented in 1967. This day is now commemorated as “Decimal Currency Day”.
When coins were introduced as part of this currency, they were available in 6 denominations: 1 cent, 2 cent, 5 cent, 10 cent, 20 cent, and 50 cent. Bronze is the material used for the 1 and 2 cents. The other coins were made of cupro-nickel.
New Zealand Dollar Foreign Exchange Rate
When the New Zealand Dollar was initially established as the country’s new currency, it was initially pegged as NZ$1 as equal to US$1.43. But the devaluation of the British Pound caused the currency exchange to change to US$1.12. Ever since then, the value of the New Zealand Dollar is directly proportional to the currency trading. The fact that this currency is among the most traded currencies has solidified its position as one of the top currencies in the foreign exchange market.
The current exchange rate for the New Zealand Dollar to the US Dollar is at US$0.71 as of 2017.
The New Zealand Dollar is recognized for its contribution to the global exchange market. Their value in the global exchange market far exceeds the relative share of New Zealand in the global GDP share. From 2010, the share of the New Zealand Dollar in the global foreign exchange market daily turnover went up from 1.6% to 2.1% in 2017.