BANKNOTES OF NEW ZEALAND
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Reserve Bank of New
Zealand - Pre-decimal Currency (1934 - 1967)
Reserve Bank of New
Zealand - Decimal Currency (1967 - Present)
|2000||190||10 Dollars||Millennium Commemorative Issue|
The New Zealand Pound (1840 - 1967)
The pound was the currency of New Zealand between 1840 and 1967. Like the British pound, it was subdivided into 240 pennies or 20 shillings. 1 shilling = 12 pence. The currency was part of the sterling zone. It was replaced in 1967 by the dollar at a rate of 2 dollars = 1 pound (1 dollar = 10 shillings).
Written and Verbal Conventions
In writing, there were several conventions for representing amounts of money in pounds, shillings and pence:
£2.3s.6d. (two pounds, three shillings and six pence)
1/- (one shilling) (slang: a bob)
11d. (eleven pence)
1½d (a penny halfpenny, three halfpence – note that the "lf" in halfpenny/halfpence was always silent - they were pronounced 'haypenny' and 'haypence' - hence the occasional spellings "ha'penny" and "ha'pence")
2/6 (two shillings and six pence, usually pronounced as "two-and-six" or "half a crown")
2/- (two shillings, or one florin) (two bob)
5s. (five shillings) (one crown) (five bob)
14-8-2 (fourteen pounds, eight shillings and tuppence – in columns of figures, such as in a ledger)
£1.10s.- (one pound, ten shillings) (thirty bob)
Halfpennies and farthings (quarter of a penny) were represented by the appropriate symbol after the whole pence.
A convention frequently used in retail pricing was to list prices over one pound all in shillings, rather than in pounds and shillings; for example, £4-18-0 would be written as 98/-.
The New Zealand Pre-decimal Coins
Intitally, British and Australian coins circulated in New Zealand. Distinct coins were introduced in 1933 in denominations of 3 and 6 pence, 1 shilling, 1 florin (2 shillings) and ½ crown (2½ shillings). All were minted in silver until 1947. In 1940, bronze ½ and 1 penny coins were introduced. All denominations were issued until 1965.
Commemorative crowns (5 shillings) were minted in 1935, 1949 and 1953 for the Treaty of Waitangi, a royal visit and the coronation of Queen Elizabeth II, respectively.
Designs of New Zealand Pre-decimal Coins
|The New Zealand Pre-decimal Banknotes|
|Private trading banks originally
issued all banknotes in New Zealand. The first bank notes were
issued in New Zealand in 1840 by the Union Bank of Australia. In
1934 the Government of New Zealand passed the Reserve Bank Act which
created the Reserve Bank of New Zealand. By virtue of the Act the
Reserve Bank was given the sole right to issue New Zealand legal
tender banknotes and coins.
The Reserve Bank of New Zealand introduced notes in 1934 for 10 shillings, 1, 5 and 50 pounds. In 1940, 10 pound notes were added. Only two series of notes were printed, the first (1934-40) featured the portrait of a Māori king, the second (1940-67) featured Captain James Cook.
The New Zealand Dollar (1967 -
In 1967, when the country decimalized its currency, the dollar replaced the New Zealand pound at a rate of 2 dollars = 1 pound. Like other dollar denominated currencies, the dollar sign "$" is used to express prices in New Zealand dollars, sometimes prices are written using NZ$ to distinguish it from other dollar currencies. The New Zealand dollar's ISO 4217 code is NZD. The value of the New Zealand dollar was initially pegged to the US dollar at a rate of US$1.39 = NZ$1. This rate changed on 21 November 1967 to US$1.12 = NZ$1 after the devaluation of the British pound, although the New Zealand dollar was devalued to a greater extent than the British pound sterling.
In 1971, the U.S.A. devalued its dollar relative to gold, leading New Zealand to peg its dollar at a value of US$1.216 with a 4.5% fluctuation range on 23 December (keeping the same gold value). From 9 July 1973 to 4 March 1985 the dollar's value was determined from a trade-weighted basket of currencies. Since 4 March 1985 the dollar's value has been determined by the financial markets, and has been in the range of about 0.39–0.74 United States dollars. The dollar's most recent minimum average daily value was 0.3922 U.S. dollars on 22 November 2000, and its most recent maximum was 0.7442 U.S. dollars on 17 March 2005. Much of this medium-term variation in the exchange rate has been attributed to differences in interest rates.
New Zealand Decimal Coins
In 1967, coins were introduced for 1, 2, 5, 10, 20 and 50 cents. The 1 and 2 cent coins were minted in bronze, with the other denominations in cupro-nickel. The 5, 10 and 20 cents were the same size as the earlier, equivalent 6 pence, 1 shilling and 1 florin. Indeed, until 1970, the 10 cents coin bore the additional legend "One Shilling". The obverse designs of all the coins featured Arnold Machin's portrait of Elizabeth II, with the legend ELIZABETH II NEW ZEALAND [date]. The reverse sides of coins introduced in 1967 did not follow the designs that were originally indended for them. Those modern art and sculpture themed designs were leaked to a newspaper and met a very negative public reaction. The final releases were given more conservative designs in line with public expectations.
In 1986, New Zealand adopted Raphael Maklouf's new portrait of the Queen on all its coins. The 1 and 2 cent coins were last minted for circulation in 1987, with collector coins being made for 1988. The coins were demonetised on 1 May 1990. The lack of 1 and 2 cent coins meant that cash transactions were normally rounded to the nearest 5 cents (10 cents as of 2006), a process known as Swedish rounding. Some larger retailers (notably one supermarket chain), in the interests of public relations, elected to round the total price down (so that $4.99 became $4.95 instead of $5.00). Alternatively, many retailers rounded all their prices to the nearest 5 cents to avoid the issue entirely, so a New Zealand shopper often encountered products for sale at prices like $4.95.
Image: 1990 New Zealand one dollar coin.
In 1990, aluminium-bronze 1 and 2 dollar coins were introduced to replace existing $1 and $2 notes. In 1999, Ian Rank-Broadley's portrait of the Queen was introduced and the legend rearranged to read NEW ZEALAND ELIZABETH II [date].
On 11 November 2004, the Reserve Bank announced that it proposed to take the 5¢
coin out of circulation and to make the existing 50, 20 and 10 cent coins
smaller and use plated steel to make them lighter. After a three-month public
submission period that ended on 4 February 2005, the Reserve Bank announced on
31 March it would go ahead with the proposed changes. The changeover period
started on 31 July 2006, with the old coins usable up until 31 October 2006. The
older 50, 20, 10 and 5 cent pieces are now no longer legal tender, but are still
redeemable at the Reserve Bank.
New Zealand Dollar Banknotes
In 1967, notes were introduced by the Reserve Bank of New Zealand in denominations of 1, 2, 5, 10, 20 and 100 dollars. 50 dollar notes were added in 1983, whilst 1 and 2 dollar notes were discontinued in 1991. The first two series of notes (1967-81 and 1981-92) differed only in the portrait of the Queen featured on the obverse. The reverses all depicted native birds and plants and remained unchanged through both series.
In 1992 A completely redesigned new series of banknotes was introduced by the Reserve Bank of New Zealand and except for the 20 dollars, the portrait of the Queen was dropped from all notes.
New Zealand banknotes, since 1999, have been printed on plastic polymer instead of conventional rag paper used for banknote production. There was a slight controversy, but this move was mostly met with curiosity by the public. Such polymer notes have many advantages, notably a photocopy can effortlessly be distinguished from the real thing by touch, and many people have been thankful that the notes go through a washing machine with no ill effects. The notes are also difficult to tear without the aid of a cutting tool, but will tear more easily than the paper notes if a tear is started. Initial versions of the polymer $5 note had issues with the ink wearing and aging prematurely, but this was rectified in later production runs. The Reserve Bank states that polymer banknotes last at least four times as long as the old conventional paper banknotes. The polymer banknotes also have vastly improved security features and are very difficult to counterfeit.
Banknotes of the Cook Islands
The New Zealand dollar is legal tender in the Cook Islands and circulates alongside Cook Islands banknotes and coins.
The value of the Cook Islands dollar is tied to the New Zealand dollar at a rate of 1:1.
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Page created: 14 November 2006
Last Update: 13 April 2007
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