New Zealand’s Currency: Overview and History of the NZD
A kiwi is a bird indigenous to New Zealand and is featured on the $1 coin. Introduced in 1840, the New Zealand Pound was the first official currency of New Zealand. Until that point, both British and Australian coins circulated in New Zealand, and continued to do so until 1897. The Pound banknotes were produced by the six different trading banks until 1924, when a single uniform design was implemented. A decade later, the Reserve Bank of New Zealand was established. Altogether it has five coins and five banknotes with the understanding currency pairs correlation for forex trading smallest being the 10-cent coin; smaller denominations have been discontinued due to inflation and production costs.
A few exceptions to GST are bank services, rent, wages (although that gets another form of tax) and duty-free goods. For information on opening a New Zealand bank account, see How to Open a New Zealand Bank Account. Gross domestic product is a measurement of the value derived from a country’s production of goods and services over a specific period.
It took another 30 years before the Reserve Bank replaced the currency of pounds, shillings, and pence with actual dollars and cents. In the year 1967 alone, the Bank printed 27 million new banknotes and 165 million new coins. The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Quick Conversions from New Zealand Dollar to United States Dollar : 1 NZD = 0.5829089 USD
The currency usually has a bird on one side of a banknote or coin as well as an important historical figure of New Zealand. During the turbulence in global financial markets during mid to late 2008, the cumulative net long positions held by Japanese margin traders in the NZD fell by nearly 90%. The New Zealand dollar is considered a carry-trade currency in that it is relatively high-yielding so investors will often buy the NZD and fund it with a lower-yielding currency such as the Japanese yen or the Swiss franc. In 1934, the Reserve Bank of convert british pounds to hungarian forints New Zealand was established, becoming the only supplier of banknotes. The original notes had a variety of designs, including that of a kiwi, the nation’s Coat of Arms, Maori King Tawhiao, and Fiordland’s Mitre Peak.
New Zealand dollar
The New Zealand government has produced polymer or plastic versions of the New Zealand dollar since 1999. The polymer composition has also increased the longevity of the banknotes. Polymer bills are estimated to last four times longer than regular linen or paper banknotes. It is estimated that the polymer note lasts four times longer than regular linen or paper notes. Interestingly, the polymer note can go through a washing machine without suffering any material damage. In 2016, the currency had its most recent update, with even more bright colors and updated security features.
Convert NZD to USD at the real exchange rate
Most will thinkforex announces free apple device promotion for new account holders work with an international credit or debit card as long as your card has a four-digit pin code. Australia ranks as New Zealand’s second-largest trading partner behind China. The neighboring country reports 6.2% of New Zealand imports in 2023. The performance of Australia’s economy has a significant impact on the New Zealand dollar as a result. The kiwi also circulates in Tokelau, Pitcairn Islands, Niue, and the Cook Islands in addition to being the official currency of New Zealand. New Zealand bill denominations include $5, $10, $20, $50, and $100.
- NZD/USD is affected by factors that influence the value of the New Zealand dollar and/or the U.S. dollar in relation to each other and other currencies.
- A floating currency is one with value that is permitted to change as it’s compared to other currencies.
- Polymer bills can go through a washing machine without suffering any material damage.
- Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens. Compare our rate and fee with our competitors and see the difference for yourself. The best way to exchange currency, for those staying in New Zealand on an extended trip or working holiday, is to transfer money from your home bank account to your New Zealand bank account. Find out how to transfer money at How to Transfer Money to Your New Zealand Bank Account. Whether you need to make cross-border payments or FX risk management solutions, we’ve got you covered.
But the New Zealand carry trade has become much less appealing as the RBNZ has aggressively reduced interest rates to combat slowing economic growth and subdued inflation. Decimalization of the NZD (division into 100 cents) took place in 1967 when the New Zealand dollar replaced the New Zealand pound at a rate of two dollars to one pound. Initially pegged to the United States dollar, NZD went through a series of changes in the fixed exchange rate until March of 1985, when the currency was allowed to float freely. The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors.