Historical Sketch

The British navigator John Fearn was the first European to report sighting of Nauru, then referred to as Pleasant Island. No European claims were issued until 1888 when Great Britain divided up their zones of influence. Nauru got incorporated into the German colony of the Marshall Islands. During World War I, Australia occupied the island and obtained a League of Nations mandate in 1920. Japan occupied Nauru during its Pacific War campaigns and kept it until after the surrender. Australia took back its territory and obtained a UN Trusteeship mandate in 1947. During the second half of the 20th century, Nauru became a center of phosphate mining so that in the 1960s the evacuation of the population to another island near the Australian coast was discussed. The Nauruan population rejected the proposal and opted for self-determination. In 1968, Nauru became an independent republic. The phosphate resources became exhausted in the 1990s, leaving behind a devastated environment and sending the economy into decline.

Monetary History Overview

Monetary economy was introduced to Nauru by the colonial powers. The remoteness of the island and, as a result, low degree of foreign settlement rendered colonial currencies scarce, neither the German Reichsmark, Australian Pound nor Japanese Military Yen played a significant role in the local commerce. The phosphate boom after the Second World War exploited by Australian and other foreign mining companies led to a larger inflow of Australian currency. In preparation of self-determination, the first Nauruan currency ordinance was passed end December 1965, adopting the Australian Dollar instead of a separate national currency. In 1976, at the height of the phosphate mining boom, the state-owned Bank of Nauru began operations and a revised currency act opened ways for issuance of a local coinage. In 1997, the Bank of Nauru obtained the central bank role and another revision of the currency act foresaw the creation of the "Nauruan Dollar" as national currency. In the 2000s, the phosphate deposits became exhausted and the economic boom came to an end. The Bank of Nauru went bankrupt and closed for business in 2006. The plans for a national currency never materialized and were officially abandoned in 2011.

Nauru joined the International Monetary Fund (IMF) on 12.04.2016.

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