Australian dollar
From Freepedia
The Australian dollar, AUD or A$, is the official currency of the Commonwealth of Australia, including the Australian Antarctic Territory, Christmas Island, Cocos (Keeling) Islands, Heard Island and McDonald Islands and Norfolk Island, as well as the independent Pacific island states of Kiribati, Nauru and Tuvalu. It is sometimes affectionately called the "Aussie battler"; during a low period (relative to the US dollar) around 2001 and 2002 the currency was sometimes locally called the "Pacific Peso." It is subdivided into 100 cents.
The Australian dollar is currently the sixth-most-traded currency in world foreign exchange markets (behind the US dollar, yen, euro, British pound and Canadian dollar) accounting for approximately 4–5% of worldwide foreign exchange transactions. The Australian dollar is popular with currency traders due to the relative lack of government intervention in the foreign exchange market, the general stability of the economy and government, and views that it offers diversification benefits in a portfolio containing the major world currencies (for example because of greater exposure to Asian economies and the commodities cycle).
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Current Denominations
Coins
Image:Oz20cent.jpg All coins portray Queen Elizabeth II on the obverse and are produced by the Royal Australian Mint.
| Australian coins [1] | ||||
| Value | Composition | Design | Mass | Diameter |
| 5 cents | 75% copper, 25% nickle | Echidna | 2.83 g | 19.41 mm |
| 10 cents | 75% copper, 25% nickle | Lyrebird | 5.65 g | 23.60 mm |
| 20 cents | 75% copper, 25% nickle | Platypus | 11.30 g | 28.52 mm |
| 50 cents | 75% copper, 25% nickle | Australian coat of arms - Dodecagonal | 15.55 g | 31.51 mm |
| 1 dollar | 92% copper, 6% aluminium, 2% nickle (gold-colored) | Five kangaroos | 9.00 g | 25.00 mm |
| 2 dollars | 92% copper, 6& aluminium, 2% nickle | Aboriginal elder | 6.60 g | 20.50 mm |
The one- and two-cent coins were discontinued in 1990–92 and withdrawn from circulation. Cash transations are rounded to the nearest five cents.
In recent years, the 20 cent, 50 cent and 1 dollar coins have been issued featuring a variety of commemorative and United Nations "year of" themes.
There is also an Australian five dollar coin and many silver and gold bullion coins in higher denominations that, like the US Two dollar note, are not a normal method of payment but are still legal tender.
Banknotes
All Australian banknotes are made of polymer and issued by the Reserve Bank of Australia. [2]
- Five Dollars (first issued in 1992 Elizabeth II (front); Parliament House (reverse) – pink
- A commemorative note was released for general circulation in 2001, marking the Centenary of Federation featuring Sir Henry Parkes (front) and Catherine Helen Spence (reverse) – purple.
- Ten Dollars (issued 1993) – Banjo Paterson (front); Dame Mary Gilmore (reverse) – blue
- This note features all the text from Banjo Patterson's most famous poem "The Man From Snowy River" in microprint on the front, and the text of Mary Gilmore's patriotic poem No Foe Shall Gather Our Harvest on the reverse.
- This note features all the text from Banjo Patterson's most famous poem "The Man From Snowy River" in microprint on the front, and the text of Mary Gilmore's patriotic poem No Foe Shall Gather Our Harvest on the reverse.
- Twenty Dollars (issued 1994) – Mary Reibey (front); John Flynn (reverse) – red
- Fifty Dollars (issued 1995) – David Unaipon (front); Edith Cowan (reverse) – yellow
- One Hundred Dollars (issued 1996) – Dame Nellie Melba (front); Sir John Monash (reverse) – green
History
The Australian dollar was introduced in 1966, not only replacing the Australian pound (long since distinct from the Pound Sterling) but also introducing a decimal system. The Australian Prime Minister Robert Menzies wished to name the currency "the Royal", and other names such as "the Austral" and "the Koala" were also proposed.
Due to Menzies' influence, the name "Royal" was settled upon, and trial designs were prepared and printed by the printing works of the Reserve Bank of Australia. The unusual choice of name for the currency proved unpopular, and it was later shelved in favour of "Dollar".
On February 14 1966 the Australian Dollar was introduced at a rate of two dollars per pound, or ten shillings per dollar.
Monetary history
In the early years after Australian Federation the British pound sterling was used as the national unit of account. Sterling circulated in conjunction with banknotes and bills of credit issued by private banks. Acceptance of Private Bank notes was not made compulsory by legal tender laws, but they were widely used and accepted. Queensland treasury notes were also in circulation and these were legal tender in Queensland.
In 1910 the federal government passed the "Australian Notes Act" which prohibited the circulation of State notes. Also passed in that year was the "Bank Notes Tax Act" which imposed a tax of ten per cent per annum on "all bank notes issued or re-issued by any bank in the Commonwealth after the commencement of this Act, and not redeemed". Both these acts remain on the statute books and perpetuate the prohibition of private currencies in Australia.
Also in 1910 a national currency was introduced by the Labor Government of Prime Minister Andrew Fisher. The new national currency was called the Australian pound consisting of twenty shillings each consisting of twelve pence. Monetary policy ensured that the Australian pound was fixed in value to the pound sterling. As such Australia was on the Gold Standard so long as Britain was.
In 1919, the pound sterling was removed from the gold standard. When it was returned to the gold standard in 1926 the sudden increase in its value (imposed by the nominated gold price) unleashed crushing deflationary pressures. Both the initial 1919 inflation and the subsequent 1926 deflation had far reaching economic effects throughout the remnants of the British empire, Australia and the world.
In January 1931, the Labor Government of Prime Minister James Scullin devalued the Australian pound by 25% against pound sterling as an emergency measure during the Great Depression. £1 sterling became worth £1 5s. 0d. Australian (A$2.50). While this devaluation no doubt removed some of the deflationary pressures introduced five years earlier it would still have been disruptive.
In 1948, when the United Kingdom devalued the pound sterling against the US dollar, Australian Prime Minister and Treasurer Ben Chifley followed suit so the Australian pound would not become over-valued in sterling zone countries, with which Australia did most of it external trade at the time. One Australian pound went from US$2.80 to US$2.24.
On February 14, 1966, a decimal currency, known as the Australian dollar, was introduced after years of planning. £1 became $2, ten shillings became $1, and one shilling became ten cents. Amounts less than a shilling were converted thus:
| ½d. = 1c | 6½d. = 5c |
| 1d. = 1c | 7d. = 6c |
| 1½d. = 1c | 7½d. = 6c |
| 2d. = 2c | 8d. = 7c |
| 2½d. = 2c | 8½d. = 7c |
| 3d. = 2c | 9d. = 8c |
| 3½d. = 3c | 9½d. = 8c |
| 4d. = 3c | 10d. = 8c |
| 4½d. = 4c | 10½d. = 9c |
| 5d. = 4c | 11d. = 9c |
| 5½d. = 5c | 11½d. = 9c |
| 6d. = 5c | 12d. = 1 s. = 10c |
Value of the Australian Dollar
In 2001, the value of one Australian dollar went below 50 US cents for the first time. As of September 2005, the Australian dollar was worth 76 US cents.
In 1966 when the Australian dollar was introduced the International Gold Standard still operated. The Australian dollar was at that time worth 980 milligrams of gold. As of September, 2005 the Australian dollar was worth 51 milligrams of gold.
Exchange rate policies
For much of its history, Australia maintained a peg to the British pound reflecting its historical ties as well as a view about the stability in value of the British pound. From 1946 to 1971 Australia maintained a peg to the US dollar under the Bretton Woods system. With the breakdown of the Bretton Woods system in 1971 Australia replace the mostly fixed peg to a moving peg against the US dollar. In September 1974 Australia moved to a peg against a basket of currencies called the TWI (trade weighted index) in an effort to reduce fluctuations associated with its peg to the US dollar. The peg to the TWI was changed to a moving peg in November 1976 where the actual value of the peg was periodically adjusted. In December 1983, the Australian government "floated" the Australian dollar, meaning that it no longer managed its value by reference to any foreign currency.
Polymer banknotes
Image:Australian $10 note 1988.jpg In 1988, the Reserve Bank of Australia issued a plastic, specifically polypropylene polymer banknote to commemorate the country's bicentenary of European settlement. These notes contained a transparent 'window' with an optically variable image of Captain James Cook as a security feature. Australian currency was the first in the world to use such features in currency. Despite initial difficulties the Reserve Bank saw potential in the issue of plastic banknotes and commenced preparations for an entirely new series made from polymer. Today all Australian notes are made of polymer.
All notes are the same width, but each note is longer than the previous lower-value note.
- $5 – 65mm × 130mm
- $10 – 65mm × 137mm
- $20 – 65mm × 144mm
- $50 – 65mm × 151mm
- $100 – 65mm × 158mm
Issues of currency
In the lead up to Federation, the currency used in the Australian colonies was the Pound Sterling, divided into 20 Shillings, each of which was divided into 12 Pence. English silver and copper coins circulated alongside Australian minted gold sovereigns (worth one pound) and half sovereigns, as well as locally minted copper trade tokens. Banknotes were issued by private banks as well as certain colonial governments such as that of Queensland. Paper denominations ranged from 1 to 100 Pounds.
After Federation in 1901, the Australian government assumed the power to issue currency and began superscribing the private issues that were in circulation, in preparation for the issue of a domestic currency.
In 1910 the first truly national Australian silver coinage was introduced in denominations of threepence, sixpence, one shilling, and two shillings (one florin). Copper pennies and halfpennies followed in 1911. In 1937 a five shilling piece was issued to commemorate the coronation of King George VI. This coins proved unpopular and was discontinued shortly after being reissued in 1938.
In 1913 the first national banknotes were introduced in denominations of 10 shillings, and 1, 5, and 10 Pounds. 1914 saw the introduction of 20, 50, 100, and 1000 Pound notes. The 1000 Pound note only saw limited circulation and was later confined to inter-bank use. There are no uncancelled examples of this note known in private hands.
In the mid 1920s a modified 10 shilling (worded as "Half Sovereign"), and reduced size 1, 5, and 10 Pound notes were issued with the side profile of King George V on the face. These notes still referred to the currency's convertibility to gold on demand. A newer 1000 Pound note with the profile of George V was also prepared but never issued. An unissued printer's trial of this note was discovered in London in 1996 and subsequently sold for in excess of 200,000 Australian Dollars. Nonetheless this note is not recognised as a legitimate Australian banknote issue.
During the Great Depression Australian currency ceased to be redeemable for gold at the previously maintained rate of one gold sovereign for one pound currency. Subsequently a new series of Legal Tender notes were designed, once again bearing the portrait of King George V, in denominations of 10 Shillings and 1, 5 and 10 Pounds. These denominations and designs were maintained and modified to accommodate the portrait of King George VI in 1938.
The coronation of Queen Elizabeth II in 1953 saw the issue of a new series with portrait of prominent persons in Australia's history.
- Ten Shilling – Matthew Flinders
- One Pound – Queen Elizabeth II
- Five Pound – John Franklin
- Ten Pound – Arthur Phillip
A fifty pound note was also prepared with the portrait of Henry Parkes, but this note was never issued. A few specimens exist in private hands and are worth a great deal to collectors.
Another coin highly sought after by collectors is the Penny dated 1930. Its rarity is so well known amongst Australians, that demand for what is akin to a blue chip investment has pushed prices to approximately 35,000 Australian Dollars for an average standard example. A proof example of the same coin recently changed hands for over 400,000 Australian Dollars, making it the most expensive copper coin in the world.
Former banknotes and coins in decimal currency
There have been two basic issues of decimal currency. The first paper issues of Australian dollars, issued in 1966, featured portraits of the following persons:
- One dollar – Elizabeth II (front); Aboriginal art designed by David Malangi (reverse)
- Two dollars – John Macarthur (front); William Farrer (reverse)
- Five dollars – Joseph Banks (front); Caroline Chisholm (reverse)
- Ten dollars – Francis Greenway (front); Henry Lawson (reverse)
- Twenty dollars – Sir Charles Kingsford-Smith (front); Lawrence Hargrave (reverse)
- Fifty dollars (first issued 1973) – Howard Florey (front); Ian Clunies Ross (reverse)
- Hundred dollars (first issued 1984) – Douglas Mawson (front); John Tebbutt (reverse)
Copper one cent and two cent coins were withdrawn from circulation in 1991. The one cent coin featured a sugar glider and the two cent coin a frill-necked lizard.
External links
- The Reserve Bank of Australia site gives further information about Australian currency (notes), including current banknote designs.
- The Royal Australian Mint site gives information on Australian coins, including current coin designs.
- Current VALUE of the Australian dollar (as measured by Gold Ounces) (source is Yahoo)
- Current VALUE of the Australian dollar (as measured by US dollars) (source is Yahoo)
- Current VALUE of the Australian dollar (as measured by CPI) (source is RBA)
(Note that a higher CPI figure indicates a reduction of value for the Australian dollar.)
See also
