Monetary History Overview

In 1840, Great Britain established colonial rule over New Zealand. The 1858 currency ordinance declared British coins current in the colony. Subsequently, legal tender status was also given to Australian coinage. In 1856, the state-owned Colonial Bank defaulted, and the government had to redeem its paper money. After that, private paper money issuance by commercial banks remained allowed but did not come with a state guarantee. In December 1931, Australia devalued its currency against the Pound Sterling by 20%. Due to the economic importance of the neighbour, New Zealand wanted to align but had to create the necessary structures first. In January 1933, the New Zealand Pound was created as national currency at par with the Australian Pound. The corresponding currency legislation was enacted retroactively in November, and the Reserve Bank of New Zealand began operations in August 1934 only. In August 1948, New Zealand severed its ties to the Australian currency, and the Pound restored parity with the Sterling, corresponding to a 25% appreciation against the Australian Pound. In 1967, the currency was decimalized, and the New Zealand Dollar. at half a Pound became the new unit. Later that year, New Zealand only partly followed the Sterling and switched back to parity with the Australian Dollar. In 1973, the exchange rate was floated, and the Dollar lost 50% of its value until the mid-1980s. Since the 2000s, the rate has remained more or less stable and even recovered part of the earlier loss.

The New Zealand territories of Tokelau and Niue were re-constituted as associated states in 1974. They are using the New Zealand currency without local legislation. The Tokelau coinage act of 1978 allows the issuance of commemorative coins in New Zealand Dollar.

New Zealand joined the International Monetary Fund (IMF) on 31.08.1961.

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