Australian dollar

The Australian dollar (currency code AUD) has been, since 1966, the currency of the Commonwealth of Australia, including Christmas Island, Cocos (Keeling) Islands, and Norfolk Island, as well as the independent Pacific Island states of Kiribati, Nauru and Tuvalu. It is normally abbreviated with the dollar sign $, A$ or $AU to distinguish it from other dollar-denominated currencies. 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 divided into 100 cents. All previous issues of Australian coins and banknotes, including pounds, shillings and pence are still legal tender.

The Australian dollar is currently the sixth-most-traded currency in world foreign exchange markets (behind the US dollar, the yen, the euro, the British pound and the 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 as well as the prevailing view that it offers diversification benefits in a portfolio containing the major world currencies (especially because of its greater exposure to Asian economies and the commodities cycle).

History

The Australian dollar was introduced on 14 February 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" 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.

In 1967 the Australian dollar effectively left the sterling area for the first time. When sterling devalued in 1967 against the US dollar, the new Australian dollar did not follow. It maintained its peg to the US dollar at the same rate.

In 1983, the Australian dollar was allowed to float against all foreign currencies.

Coins

All coins portray Queen Elizabeth II on the obverse and are produced by the Royal Australian Mint.

The one and two-cent coins were discontinued in 1990-91 and withdrawn from circulation. Cash transactions are rounded to the nearest five cents, or rounded down at the option of the retailer. In commemoration of the 40th anniversary of decimal currency, the 2006 mint Proof and Uncirculated sets include 1 and 2 cent coins. As with most public changes to currency systems, there has been a great amount of seignorage of these discontinued coins, meaning the vast majority are never going to be worth a significant amount of money.

Australia has long issued commemorative 50 cent coins as a follow up to the commemorative Florins used prior to decimal currency. The first commemorative 50 cent coin was in 1970, commemorating Captain Cook's departure from England, followed in 1977 by a coin for Queen Elizabeth II's Silver Jubilee, the wedding of Charles and Diana in 1981, Commonwealth Games in 1982 and the Australia Bicentennial in 1988. Issues expanded into greater numbers in the 1990s and the 21st century, responding to collector demand.

Australia has also made special issues of 20 cent and $1 coins.

There are also many Australian five dollar coins of Aluminium/Bronze and Bi-Metal as well as many silver and gold bullion coins in higher denominations. These, like the U.S coins of higher denomination than 1 dollar or which are made of precious metals, are not normally used in payment but are still legal tender.

Banknotes

First series

The first paper issues of Australian dollars, issued in 1966, featured portraits of the following persons:

Image:old_aust_one_dollar_note(front).JPG|1 banknote front - Elizabeth II Image:old_aust_one_dollar_note(back).JPG|$1 banknote back - Aboriginal art designed by David Malangi Image:AUD2.jpg|$2 banknote front - John Macarthur Image:NoImage.PNG|$2 banknote back - William Farrer Image:NoImage.PNG|$5 banknote front - Joseph Banks Image:NoImage.PNG|$5 banknote back - Caroline Chisholm Image:GreenwayNote.JPG|$10 banknote front - Francis Greenway Image:NoImage.PNG|$10 banknote back - Henry Lawson Image:NoImage.PNG|$20 banknote front - Charles Kingsford Smith Image:Aud20p.jpg|$20 banknote back - Lawrence Hargrave Image:Australian $50 note paper front.jpg|$50 banknote front - Howard Florey Image:Australian$50paper.JPG|$50 banknote back - Ian Clunies Ross Image:100 dollar note front.jpg|$100 banknote front - Douglas Mawson Image:NoImage.PNG|$100 banknote back - John Tebbutt

The $5 note was not issued until 1967. The $1 (10/-,) $2 (£1,) $10 (£5,) and $20 (£10) had exact exchange rates with pounds, but the $5 (£2/10) didn't, so it was introduced after people had a chance to get used to decimal currency. The $50 and $100 notes were introduced in 1973 and 1984 respectively.

Polymer series

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.

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, commencing with the $5 note in 1992. In 1995, the design of the $5 note was updated to match the rest of the New Note Series, with additional slight changes in 1996. In 2001, a special commemorative $5 note was produced, but in 2002, the previous version's production commenced again.

In 2002, the design of all notes were slightly changed to include the names of the people pictured on them under the portraits, and swapping the order of the signatures of officials on the notes.

Today all Australian notes are made of polymer.

|| Australian_5note_back.jpg || Recoloured
$5 ||rowspan=2| Violet/pink || || 24 April 1995 || Australian_5note_back_(new).jpg || Federation
$5² || Henry Parkes || Catherine Helen Spence || None or "1901-2001" || 1 January 2001 || Leaf shaped window and "5" || Australian_10note_back.jpg || $10³ || 137 x 65 mm || Blue || Banjo Paterson || Dame Mary Gilmore || || 1 November 1993 || Windmill || Australian_20note_back.jpg || $20 || 144 x 65 mm || Red || Mary Reibey || Reverend John Flynn || || 31 October 1994 || Compass and "20 || Australian_50note_back.jpg || fifty dollar note|$50" target="_blank" >^* || 151 x 65 mm || Yellow || David Unaipon || Edith Cowan || || 4 October 1995 || Southern Cross and "50" || Australian_100note_back.jpg || $100 || 158 x 65 mm || Green || Dame Nellie Melba || Sir John Monash || || 15 May 1996 || Lyrebird and "100"

Second series ^*
Image Front	Image Back	Value	Dimensions	Colour	Obverse	Reverse	Printed Date	Issued Date	Transparent Window
		Original $5¹	130 x 65 mm	Pale mauveRenniks,Australian coins and banknotes 19th edition pg 168.	Queen Elizabeth II	Parliament House	1992	7 July 1992	Gum flower
					Queen Elizabeth II	Parliament House			Gum flower

Notes

The colour faded with wear and tear
Commemorating the Centenary of Federation
This note features all the text from Banjo Paterson'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.

Value of the Australian dollar

In 2001, the value of one Australian dollar went below 50 US cents for the first time. As of May 2006, the Australian dollar was worth 77 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 July 2006 the Australian dollar was worth 36 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, but it was effectively pegged to sterling until 1967. With the breakdown of the Bretton Woods system in 1971, Australia converted 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, causing the actual value of the peg to be periodically adjusted. In December 1983, the Australian Labor government led by Prime Minister Bob Hawke and Treasurer Paul Keating "floated" the Australian dollar. From that point movements in the Australian dollar continued to reflect the strength of its terms of trade. For decades Australia's reliance upon commodity (mineral & farm) exports has seen the Australian dollar rally during global booms, and fall when mineral prices slumped or when domestic spending overshadowed its export earnings outlook. The currency's high volatility, currency exposure and interest swap has made the AUD one of the most traded currencies in the world, far in excess of the economy's importance (2% of global economic activity).

Reference

External links

The Perth Mint is Australia's precious metals mint, making non circulating /collector coins in silver, gold, and platinum.
Note Printing Australia is the printer of Australia's notes, and also inventor of the abovementioned polymer banknotes, and world exporter of this technology.

(Note that a higher CPI figure indicates a reduction of value for the Australian dollar.)

Australian Dollar Market Summary on a daily and weekly basis.
The Money Tracker site allows users to track Australian banknotes as they circulate around Australia.

Economy of Australia

Gourt Home::Gourt :: Australian dollar