Historical Sketch

The Dutch navigator Jacob Roggeveen discovered the Samoa archipelago for the Europeans in 1722 and called them Vuyle Eilandt (dirty island). In 1768, it was rediscovered by the French Louis-Antoine de Bougainville, who named the Îles Navigateurs. In the 1870s, rivalling colonial interests led to the establishment of German, British and United States trading posts. In 1889, a tripartite protectorate was established over the islands, but this did not settle the colonial conflict. The Samoa Treaty of 1899 finally achieved this when Great Britain withdrew the claim, and the islands were partitioned between Germany (western part) and the United States (eastern part). During World War I, Great Britain occupied the German colony and ceded it to New Zealand for administration under a League of Nations mandate, later United Nations trusteeship. In 1962, Western Samoa attained independence as a parliamentary democracy with a traditional paramount chief as elected head of state. In July 1997, the Samoan constitution was amended by dropping the "Western" from the country name to assert the claim on the entire archipelago.

Monetary History Overview

In pre-colonial times, monetary economy was not developed in Samoa. In the Western part, German accounting was introduced in 1901, but German coins were not imported in large amounts nor was any local money produced. British and US coinage dominated the payment transactions. The League of Nations mandate under which New Zealand took over administration prescribed the creation of a Samoan Treasury as issuing authority for the territory. It began operations in April 1922 and created the Samoan Pound as national currency. It was on par with the Pound Sterling, but may have followed the devaluation of the Australian Pound and the subsequent creation of a New Zealand currency in 1933 (unclear). When New Zealand re-established parity with Sterling in 1948, the Samoan Pound also returned to parity with the New Zealand currency. Independence of (Western) Samoa in 1962 did not change the monetary situation, except for the fact that three years before the state-owned Bank of Western Samoa had taken over money issuance from the Treasury. In 1967, the currency was decimalized, and the Samoan Tala at half a Pound became the new unit. Later that year, Samoa did not follow the Sterling devaluation, unlike New Zealand which had done a partial devaluation re-aligning its currency with the Australian Dollar. So, the Tala appreciated by 25% against the New Zealand Dollar but the peg remained in place. In 1973, the Tala briefly repegged to the US Dollar just to change currency policy again two years later. In October 1975, the Tala got pegged to a currency basked that was identical to the one used in New Zealand, such that the Samoan and New Zealand currencies had fixed ratios. The Samoan peg was, however, adjusted frequently such that the Tala depreciated by more than 20% against the New Zealand Dollar over the next ten years. The issuance privilege of the Bank of Western Samoa had expired in 1980. Since the establishment of a central bank required more time a currency board secured the interim until 1984, when the Central Bank of (Western) Samoa finally took over. In the following, a more independent monetary policy began, and the Tala decoupled from the New Zealand currency in 1985. During the 1980s, the Samoan currency lost more than 50% of its value, and the devaluation continued at a lower pace throughout the 1990s. After the turn of the millennium, the Tala regained some value and has maintained stability against the US Dollar since then.

Samoa joined the International Monetary Fund (IMF) on 28.12.1971.

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Monetary History Sources