Science Fair Project Encyclopedia
The Australian dollar, AUD or A$, is the official currency of the Commonwealth of Australia, including the Australian Antarctic Territory, Christmas Island, Cocos (Keeling) Islands, Heard Island and McDonald Islands and Norfolk Island, as well as the independent Pacific island states of Kiribati, Nauru and Tuvalu. It is sometimes affectionately called the "Aussie battler"; during a low period around 2001 and 2002 the currency was sometimes locally called the "Pacific Peso."
The Australian dollar is currently the sixth most-traded currency in world foreign exchange markets (behind the U.S. dollar, yen, euro, British pound and Canadian dollar) accounting for approximately 4–5 percent of worldwide foreign exchange transactions. The Australian dollar is popular with currency traders due to the lack of government intervention in the exchange rate and higher interest rates than comparable economies.
Current banknotes and coins
Each Australian dollar is composed of 100 cents. The smallest coin in current circulation is equal to five cents, the one and two cent coins having been discontinued in 1990-92 and withdrawn from circulation. (Cash transactions are usually rounded to the nearest multiple of five cents, although some merchants round down instead.)
All Australian notes are made of polymer.
- One Dollar coin (first issued 1984) - a coin featuring five kangaroos and Elizabeth II - gold coloured
- Two Dollar coin - (first issued 1988) - a coin featuring an Aboriginal elder and Elizabeth II - gold coloured
- Five Dollar coin - (first issued 1988, then bi-annualy) - a coin featuring a theme and Elizabeth II - gold coloured
- Five Dollar note - (first issued in 1992 Elizabeth II (front); Parliament House (reverse) - pink
- Ten Dollar note (issued 1993) - Banjo Paterson (front); Dame Mary Gilmore (reverse) - blue
- This note features all the text from Banjo Patterson's most famous poem "The Man From Snowy River" in microprint.
- This note features all the text from Banjo Patterson's most famous poem "The Man From Snowy River" in microprint.
- Twenty Dollar note (issued 1994) - Mary Reibey (front); John Flynn (reverse) - red
- Fifty Dollar note (issued 1995) - David Unaipon (front); Edith Cowan (reverse) - yellow
- One Hundred Dollar note (issued 1996) - Dame Nellie Melba (front); Sir John Monash (reverse) - green
The fractional coinage features the monarch on the obverse side, and Australian native animals on the reverse:
- Five cent - smallest "silver" coin featuring an echidna
- Ten cent - a lyrebird
- Twenty cent - the platypus
- Fifty cent - the Australian coat of arms. This large coin is dodecagonal (twelve-sided) cupro-nickel, it replaced a round silver 50 cent coin which, soon after issue, became far more valuable for its silver content than as a unit of currency.
In recent years, 20 and 50c as well as 1 and 5 dollar coins have also been issued featuring a variety of commemorative and United Nations "year of" themes.
The Australian five dollar coin is like the United States Two dollar note not a normal method of payment but still legal tender.
The Australian dollar was introduced in 1966, not only replacing the Australian pound (long since distinct from the Pound Sterling) but also introducing a decimal system. The Australian Prime Minister Robert Menzies wished to name the currency "the Royal", and other names such as "the Austral" and "the Koala" were also proposed.
Due to Menzies' influence, the name "Royal" was settled upon, and trial designs were prepared and printed by the printing works of the Reserve Bank of Australia. The unusual choice of name for the currency proved unpopular, and it was later shelved in favour of "Dollar".
In 1910 an Australian currency was first introduced by the Labor Government of Prime Minister Andrew Fisher - the Australian pound consisting of twenty shillings each consisting of twelve pence. The Australian pound was on the Gold Standard and was equal in value to pound sterling. Prior to this, pound sterling was used in conjunction with banknotes and bills of credit issued by private banks. Coins were first introduced in 1910; Commonwealth Bank notes followed soon after.
In 1919, the pound sterling was removed from the gold standard. When it was returned to the gold standard in 1926 the chosen gold price unleashed deflationary pressures.
In January 1931, the Labor Government of Prime Minister James Scullin devalued the Australian pound by 25 per cent against pound sterling as an emergency measure during the Great Depression. £1 sterling became worth £1 5s. 0d. Australian (AUD$2.50). While this devaluation no doubt removed some of the deflationary pressures introduced five years earlier it would still have been disruptive.
In 1948, when the United Kingdom devalued the pound sterling against the U.S. dollar, Australian Prime Minister and Treasurer Ben Chifley followed suit so the Australian pound would not become over-valued in sterling zone countries, with which Australia did the most trade at the time. One Australian pound went from US$2.80 to US$2.24.
On February 14, 1966, a decimal currency, known as the Australian dollar, was introduced after years of planning. £1 became $2, ten shillings became $1, and one shilling became ten cents. Amounts less than a shilling were converted thus:
|½d. = 1c||6½d. = 5c|
|1d. = 1c||7d. = 6c|
|1½d. = 1c||7½d. = 6c|
|2d. = 2c||8d. = 7c|
|2½d. = 2c||8½d. = 7c|
|3d. = 2c||9d. = 8c|
|3½d. = 3c||9½d. = 8c|
|4d. = 3c||10d. = 8c|
|4½d. = 4c||10½d. = 9c|
|5d. = 4c||11d. = 9c|
|5½d. = 5c||11½d. = 9c|
|6d. = 5c||12d. = 1 s. = 10c|
In 1966 following the introduction of the Australian dollar the value of the national currency continued to be managed in accord with the Bretton Woods gold standard as it had been since 1944. Essentially the value of the Australian dollar was managed with reference to the value of gold, although in practice the US dollar was used.
In keeping with Australia's move to a metric system the value of the new Australian dollar was equivalent to one gram of gold.
In 1971 the U.S. government discontinued the practice of managing the value of the U.S. dollar with relation to the value of gold and from this point onward Australia slowly loosened its usage of U.S. dollar as a means of measuring value. However for more than a decade it continued to peg to the U.S. dollar using a moving peg.
In 1983, the Australian government "floated" the Australian dollar, meaning that it no longer managed its value by reference to the US dollar or any other foreign currency. Today the value of the Australian dollar is managed with almost exclusive reference to domestic measures of value such as the CPI (Consumer Price Index).
In 2001, the value of one Australian dollar went below 50 US cents for the first time. As of March 2005, the Australian dollar is worth about 77 US cents. In 1966 the Australian dollar was worth about 980 milligrams of gold. As of Feb, 2005, the Australian dollar is worth 57 milligrams of gold.
In 1988, the Reserve Bank of Australia issued a plastic, specifically polypropylene polymer banknote to commemorate the country's bicentenary of European settlement. These notes contained a transparent 'window' with a holographic image of Captain James Cook as a security feature. Australian currency was the first in the world to use such features in currency. Despite initial difficulties the Reserve Bank saw potential in the issue of plastic banknotes and commenced preparations for an entirely new series made from polymer. Today all Australian notes are made of polymer.
Issues of currency
In the lead up to Federation, the currency used in the Australian colonies was the Pound Sterling, divided into 20 Shillings, each of which was divided into 12 Pence. English silver and copper coins circulated alongside Australian minted gold sovereigns (worth one pound) and half sovereigns, as well as locally minted copper trade tokens. Banknotes were issued by private banks as well as certain colonial governments such as that of Queensland. Paper denominations ranged from 1 to 100 Pounds.
After Federation in 1901, the Australian government assumed the power to issue currency and began superscribing the private issues that were in circulation, in preparation for the issue of a domestic currency.
In 1910 the first truly national Australian silver coinage was introduced in denominations of threepence, sixpence, one shilling, and two shillings (one florin). Copper pennies and halfpennies followed in 1911. In 1937 a five shilling piece was issued to commemorate the coronation of King George VI. This coins proved unpopular and was discontinued shortly after being reissued in 1938.
In 1913 the first national banknotes were introduced in denominations of 10 shillings, and 1, 5, and 10 Pounds. 1914 saw the introduction of 20, 50, 100, and 1000 Pound notes. The 1000 Pound note only saw limited circulation and was later confined to inter-bank use. There are no uncancelled examples of this note known in private hands.
In the mid 1920s a modified 10 shilling (worded as "Half Sovereign"), and reduced size 1, 5, and 10 Pound notes were issued with the side profile of King George V on the face. These notes still referred to the currency's convertibility to gold on demand. A newer 1000 Pound note with the profile of George V was also prepared but never issued. An unissued printer's trial of this note was discovered in London in 1996 and subsequently sold for in excess of 200,000 Australian Dollars. Nonetheless this note is not recognised as a legitimate Australian banknote issue.
During the Great Depression Australian currency ceased to be redeemable for gold at the previously maintained rate of one gold sovereign for one pound currency. Subsequently a new series of Legal Tender notes were designed, once again bearing the portrait of King George V, in denominations of 10 Shillings and 1, 5 and 10 Pounds. These denominations and designs were maintained and modified to accommodate the portrait of King George VI in 1938.
- Ten Shilling - Matthew Flinders
- One Pound - Queen Elizabeth II
- Five Pound - John Franklin
- Ten Pound - Arthur Phillip
A fifty pound note was also prepared with the portrait of Henry Parkes, but this note was never issued. A few specimen exist in private hands and are worth a great deal to collectors.
Another coin highly sought after by collectors is the Penny dated 1930. Its rarity is so well known amongst Australians, that demand for what is akin to a blue chip investment has pushed prices to approximately 35,000 Australian Dollars for an average standard example. A proof example of the same coin recently changed hands for over 400,000 Australian Dollars, making it the most expensive copper coin in the world.
Former banknotes and coins in decimal currency
- One dollar - Elizabeth II (front); Aboriginal art (reverse)
- Two dollars - John Macarthur (front); William Farrer (reverse)
- Five dollars - Joseph Banks (front); Caroline Chisholm (reverse)
- Ten dollars - Francis Greenway (front); Henry Lawson (reverse)
- Twenty dollars - Sir Charles Kingsford-Smith (front); Lawrence Hargrave (reverse)
- Fifty dollars (first issued 1973) - Howard Florey (front); Ian Clunies Ross (reverse)
- Hundred dollars (first issued 1984) - Douglas Mawson (front); John Tebbutt (reverse)
- The Reserve Bank of Australia site gives further information about Australian currency (notes), including current banknote designs.
- The Royal Australian Mint site gives information on Australian coins, including current coin designs.
- Current VALUE of the Australian dollar (as measured by Gold Ounces) (source is Yahoo)
- Current VALUE of the Australian dollar (as measured by US dollars) (source is Yahoo)
- Current VALUE of the Australian dollar (as measured by CPI) (source is RBA)
(Note that a higher CPI figure indicates a reduction of value for the Australian dollar.)
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