Australian dollar


The Australian dollar is the official currency and legal tender of Australia, including all of its external territories, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu., it was the sixth most-traded currency in the foreign exchange market and as of 2024 the sixth most-held reserve currency in global reserves.
The Australian dollar was introduced as a decimal currency on 14 February 1966 to replace the non-decimal Australian pound, with the conversion rate of two dollars to the pound. It is subdivided into 100 cents. The $ symbol precedes the amount. On the introduction of the currency, the $ symbol was intended to have two strokes, but the version with one stroke has also always been acceptable.
, there were A$4.4 billion in coins and A$101.3 billion in notes of Australian currency in circulation, or around A$6,700 per person in Australia, which includes cash reserves held by the banking system and cash in circulation in other countries or held as a foreign exchange reserve.

Constitutional basis

gives the Commonwealth Parliament the power to legislate with respect to "currency, coinage, and legal tender". The states are not allowed to coin money, in accordance with section 115 which provides that " State shall not coin money, nor make anything but gold and silver coin a legal tender in payment of debts". Australian coins are now produced at the Royal Australian Mint in Canberra.

History

Background

Before Federation in 1901, the six colonies that comprised Australia had separate currencies, all of which closely replicated the British currency system, and were usually exchangeable with each other on a one-to-one basis. Hence Federation was not seen as urgently requiring a single, unified currency. For another 10 years, colonial banknotes and coins continued to be the main circulating currencies.
In 1902, a select committee of the House of Representatives, chaired by George Edwards, had recommended that Australia adopt a single, national decimal currency, with a pound divided into ten florins and each florin comprising 100 cents. However, the recommendation was not acted upon.
The Australian pound was introduced in 1910, at par with the pound sterling £A1 = £1. Like the UK pound, it was divided into 240 pence, or 20 shillings. In December 1931, the Australian currency was devalued by 25%, so that one pound five shillings Australian was equivalent to one pound sterling.
In 1937, a banking royal commission, appointed by the Lyons government, recommended that Australia adopt "a system of decimal coinage... based upon the division of the Australian pound into 1000 parts". This recommendation was not accepted either.

Adoption of the dollar

In February 1959, treasurer Harold Holt appointed a Decimal Currency Committee, chaired by Walter D. Scott, to examine the merits of decimalisation. The committee reported in August 1960 in favour of decimalisation and proposed that a new currency be introduced, to be modelled on South Africa's replacement of the South African pound with the rand. The Menzies government announced its support for decimalisation in July 1961, but delayed the process in order to give further consideration to the implementation process. In April 1963, Holt announced that a decimal currency was scheduled to be introduced in February 1966, with a base unit equal to 10 shillings, and that a Decimal Currency Board would be established to oversee the transition process.
A public consultation process was held in which over 1,000 names were suggested for the new currency. This was reduced to a shortlist of seven names: austral, crown, dollar, pound, regal, tasman and royal. In June 1963, Holt announced that the new currency would be called the "royal". This met with widespread public disapproval, and three months later it was announced that it would instead be named the "dollar".
The pound was replaced by the dollar on 14 February 1966 with the conversion rate of A$2 = £A1. For example, a pre-decimal amount of nine pounds, sixteen shillings and sixpence became $19.65 in terms of dollars and cents. Since Australia was still part of the fixed-exchange sterling area, the exchange rate was fixed to the pound sterling at a rate of A$1 = 8s sterling = A$2.50, and in turn £1. In 1967, Australia effectively left the sterling area when the pound sterling was devalued against the US dollar from US$2.80 to US$2.40, but the Australian dollar chose to retain its peg to the US dollar at A$1 = US$1.12.
The Australian dollar is legal tender in its external territories: Christmas Island, Cocos Islands, and Norfolk Island; and is also official currency in Kiribati, Nauru, and Tuvalu. It was legal tender in Papua New Guinea until 31 December 1975 when it was replaced by the kina, and in Solomon Islands until 1977 when it was replaced by the Solomon Islands dollar.

Coins

In 1966, coins were introduced in denominations of 1 and 2 cents ; 5, 10, and 20 cents ; and 50 cents. The 50-cent coins in 80% silver were no longer minted after March 1968 due to the intrinsic value of the silver content rising to exceed the face value of the coins. Aluminium bronze 1 dollar coins were introduced in 1984, followed by aluminium bronze 2 dollar coins in 1988, to replace the banknotes of that value. In everyday Australian parlance, these coins collectively are referred to as "gold coins". 1 and 2 cent coins were discontinued in 1991 and withdrawn from circulation in 1992; since then cash transactions have been rounded to the nearest 5 cents.
Australia's coins are produced by the Royal Australian Mint, which is located in the nation's capital, Canberra. Since opening in 1965, the Mint has produced more than 14 billion circulating coins, and has the capacity to produce more than two million coins per day, or more than 600 million coins per year.
Current Australian 5, 10 and 20 cent coins are identical in size to the former Australian, New Zealand, and British sixpence, shilling, and two shilling coins. Pre-decimal Australian coins remain legal tender for 10 cents per shilling. Before 2006 the old New Zealand 5, 10 and 20 cent coins were often mistaken for Australian coins of the same value, and vice versa, and therefore circulated in both countries. The UK replaced these coins with smaller versions from 1990 to 1993, as did New Zealand in 2006. Still, some confusion occurs with the larger-denomination coins in the two countries; Australia's $1 coin is similar in size to New Zealand's $2 coin, and the New Zealand $1 coin is similar in size to Australia's $2 coin.
With a mass of and a diameter of, the Australian 50-cent coin is one of the largest coins used in the world today.

Commemorative coins

The Royal Australian Mint also has an international reputation for producing quality numismatic coins. It has first issued commemorative 50-cent coins in 1970, commemorating James Cook's exploration along the east coast of the Australian continent, followed in 1977 by a coin for Queen Elizabeth II's Silver Jubilee, the wedding of Charles, Prince of Wales and Lady Diana Spencer in 1981, the Brisbane Commonwealth Games in 1982, and the Australian Bicentenary in 1988. Issues expanded into greater numbers in the 1990s and the 21st century, responding to collector demand. Commemorative designs have also been featured on the circulating two dollar, one dollar, and 20 cent coins.
In commemoration of the 40th anniversary of decimal currency, the 2006 mint proof and uncirculated sets included one- and two-cent coins. In early 2013, Australia's first triangular coin was introduced to mark the 25th anniversary of the opening of Parliament House. The silver $5 coin is 99.9% silver, and depicts Parliament House as viewed from one of its courtyards.

Banknotes

First series

The first paper issues of the Australian dollar were issued in 1966. The $1, $2, $10 and $20 notes had exact equivalents in the former pound notes. The $5 note was issued in 1967, the $50 was issued in 1973 and the $100 was issued in 1984.
The $1 banknote was replaced by a $1 coin in 1984, while the $2 banknote was replaced by a smaller $2 coin in 1988. Although no longer printed, all previous notes of the Australian dollar remain legal tender.
Shortly after the changeover, substantial counterfeiting of $10 notes was detected. This provided an impetus for the Reserve Bank of Australia to develop new note technologies jointly with the Commonwealth Scientific and Industrial Research Organisation, culminating in the introduction of the first polymer banknote in 1988.

First polymer series

Australia was the first country to produce polymer banknotes, more specifically made of polypropylene polymer, which were produced by Note Printing Australia. These polymer notes are cleaner than paper notes, are more durable and easily recyclable.
The first polymer banknote was issued in 1988 as a $10 note commemorating the bicentenary of European settlement in Australia. The note depicted on one side a young male Aboriginal person in body paint, with other elements of Aboriginal culture. On the reverse side was the ship Supply from the First Fleet, with a background of Sydney Cove, as well as a group of people to illustrate the diverse backgrounds from which Australia has evolved over 200 years.
The first polymer series was rolled out starting 1992 and featured the following persons:
A special centenary issue of the $5 note in 2001 featured Sir Henry Parkes and Catherine Helen Spence. In 2015–2016 there were petitions to feature Fred Hollows on the upgraded $5 note, but failed to push through when the new note was introduced on 1 September 2016.
Australia also prints polymer banknotes for a number of other countries through Note Printing Australia, a wholly owned subsidiary of the Reserve Bank of Australia. Note Printing Australia prints polymer notes or simply supplies the polymer substrate for a growing number of other countries including Bangladesh, Brunei, Chile, Kuwait, Malaysia, Mexico, Nepal, New Zealand, Papua New Guinea, Romania, Samoa, Singapore, Solomon Islands, Sri Lanka and Vietnam. Many other countries are showing a strong interest in the new technology.