The Australian dollar is the currency of the Commonwealth of Australia, including Christmas Island, Cocos (Keeling) Islands, and Norfolk Island, as well as the independent Pacific Island states of Kiribati, Nauru and Tuvalu.

The Australian dollar is currently the fifth-most-traded currency in the world foreign exchange markets behind the US dollar, the euro, the Japanese yen and the pound sterling. The Australian dollar is popular with currency traders, because of the comparatively high interest rates in Australia, the relative freedom of the foreign exchange market from government intervention, the general stability of Australia’s economy and political system, and the prevailing view that the Australian dollar offers diversification benefits in a portfolio containing the major world currencies, especially because of its greater exposure to Asian economies and the commodities cycle. The currency is commonly referred to by foreign-exchange traders as the „Aussie”.

Summary info

Summary information about Australian dollar

ISO 4217 Code:

AUD

Currency sign:

$, A$ or AUD

Country:

Australia, Kiribati, Nauru and Tuvalu

Subunit:

cent

Coins:

5 cents, 10 cents, 20 cents, 50 cents, 1 Australian dollar, 2 Australian dollars

Banknotes:

5 Australian dollars, 10 Australian dollars, 20 Australian dollars, 50 Australian dollars, 100 Australian dollars

Central bank:

Reserve Bank of Australia

History

With pounds, shillings and pence to be replaced by decimal currency on 14 February 1966, many names for the new currency were suggested. In 1965, the Prime Minister, Sir Robert Menzies, a monarchist, wished to name the currency the royal. Other proposed names included more exotic suggestions such as the austral, the oz, the boomer, the roo, the kanga, the emu, the digger, the kwid, the dinkum, the ming (Menzies’ nickname). Owing to Menzies’ influence, the name royal was settled on, and trial designs were prepared and printed by the Reserve Bank of Australia. The choice of name for the currency proved unpopular, and it was later dropped in favor of the dollar.

The Australian pound, introduced in 1910 and officially distinct in value from the pound sterling since devaluation in 1931, was replaced by the dollar on 14 February 1966. The rate of conversion for the new decimal currency was two dollars per Australian pound, or ten Australian shillings per dollar. The exchange rate was pegged to the pound sterling at a rate of 1 dollar = 8 shillings (2.50 dollars = 1 pound sterling). In 1967, Australia effectively left the Sterling Area when the pound sterling was devalued against the U.S. dollar and the Australian dollar did not follow. It maintained its peg to the U.S. dollar at the rate of 1 Australian dollar = 1.12 U.S. dollars.

Coins

In 1966, coins were introduced in denominations of 1, 2, 5, 10, 20 and 50 cents. The initial 50 cent coins contained high silver content and were withdrawn after a year for fear that the intrinsic value of the silver content would exceed the face value of the coins. One-dollar coins were introduced in 1984, followed by two-dollar coins in 1988. The one- and two-cent coins were discontinued in 1991 and withdrawn from circulation. In commemoration of the 40th anniversary of decimal currency, the 2006 mint proof and uncirculated sets included one- and two-cent coins. Cash transactions are rounded to the nearest five cents. As with most public changes to currency systems, there has been a great amount of seignorage of the discontinued coins. All coins portray the head of state, Queen Elizabeth II, on the obverse, and are produced by the Royal Australian Mint.

Australia has regularly issued commemorative 50-cent coins. The first was 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. Australia has also made special issues of 20-cent and one-dollar coins.

The portrait of Queen Elizabeth II on the obverse side has gone through some changes. The first change was when the decimal system was introduced in 1966, the next facelift came in 1985, with a new crown and pose, and finally the most recent in 1999, showing a more age-appropriate portrait of the queen. In 2000, the Royal Australian Mint circulated a commemorative 50c coin marking the Royal Visit of Queen Elizabeth. Exceptionally, this coin bore a different portrait of the Queen to that used on other Australian coins. It was the first occasion on which an Australian coin bore a representation of the Sovereign which was not synchronous with that used in the other Commonwealth Realms. In 2001, the normal portrait was restored to 50c coins.

There are many five-dollar coins, of aluminum/bronze and bi-metal, and many silver and gold bullion coins in higher denominations. These are not normally used in payment, although they are legal tender.

Current Australian 5-, 10- and 20-cent coins are identical in size to the former Australian, New Zealand and British sixpenny, shilling and two shilling (florin) coins. In 1990, the UK replaced these coins with smaller versions, as did New Zealand in 2006 - at the same time discontinuing the five-cent coin. With a mass of 15.55 grams and a diameter of 31.51 mm, the Australian 50-cent coin is one of the largest sized coins used in the world today. In circulation New Zealand 5-, 10- and 20-cent coins were often mistaken for Australian coins of the same value, owing to their identical size and shape.

Banknotes

The issuance of Australian banknotes has its origins in the Australian Notes Act of 1910. Prior to this, paper currency circulating in Australia had comprised banknotes issued by trading banks and by one State Government. The Act of 1910 made it an offense for any bank to circulate banknotes issued by a State and withdrew their status as legal tender. Issue of banknotes by trading banks was effectively discouraged by the Bank Notes Tax Act, also of 1910, which imposed a tax of 10 per cent per annum on all banknotes issued by them.

The Notes Act of 1910 vested control of the issue of banknotes in the Commonwealth Treasury. In 1920, control was transferred to a Board of Directors of four members, appointed by the Commonwealth Government, with the Governor of the Commonwealth Bank an ex officio member and Chairman. At the same time the administration of the banknote issue was taken over by a special Department of the Commonwealth Bank, although the Bank and the Notes Board were formally independent of one another.

In 1924, with the establishment of a Commonwealth Bank Board, control of the issue of banknotes passed from the Notes Board to the Board of Directors of the Commonwealth Bank. In 1945, the Commonwealth Bank Act formally established the Commonwealth Bank as sole legal issuer of Australian banknotes. In 1960, this role passed to the Reserve Bank of Australia which has assumed responsibility for the central banking (including banknote issue) functions since that time. The Reserve Bank Act 1959 stipulates, among other things, that Australian banknotes be printed by, or under the authority of, the Reserve Bank. Banknotes are printed at Note Printing Australia Limited (a separately incorporated, wholly owned subsidiary of the Reserve Bank of Australia) and distributed by armored car companies on behalf of banks and other commercial customers.

For three years after the 1910 Act, some of the earlier banknotes circulated as Australian banknotes, having been overprinted by the Treasury as a temporary measure until new designs were ready for Australia’s first distinctive banknotes. The first printing works to produce the new banknotes was situated near the docks at the western end of Flinders Street, Melbourne.

In 1912, Thomas Samuel Harrison, an Englishman with extensive knowledge and experience in the field of security printing, was appointed Australia’s first banknote printer. After a busy year acquiring machinery and setting up production facilities, Harrison had the first Australian banknote – of ten shillings denomination – ready for numbering on 1 May 1913.

The growth of Australia’s economy and its population, with consequent need to provide for a continually rising banknote circulation, made increasing demands on the banknote printer’s resources. A larger establishment, in the Melbourne suburb of Fitzroy, was commissioned in 1924. By the early 1970s the Fitzroy premises were no longer adequate and the Bank began planning the construction of a new banknote printing complex at Craigieburn, 25 kilometers north of Melbourne, beside the Hume Highway. Production of banknotes commenced there in October 1981. Note Printing Branch was renamed Note Printing Australia in 1990, and was established as a separately incorporated, wholly owned subsidiary of the Reserve Bank of Australia in 1998.

Since 1913 there have been seven series of Australian banknotes issued. The present series of Australian banknotes is the first in the world to be printed on polymer substrate instead of paper. It consists of $5, $10, $20, $50 and $100 denominations. A $1 banknote ceased to be issued following the introduction of a $1 coin on 14 May 1984. Similarly, a $2 banknote was withdrawn following the introduction of a $2 coin on 20 June 1988.

Australia issued the world’s first polymer banknote, a $10 commemorative banknote, in January 1988, to mark Australia’s bicentenary. This banknote incorporated radical new technology developed in Australia and set the scene for a new era of banknotes in the world.

AUD banknotes pictures gallery

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Useful links

About Reserve Bank of Australia:

Reserve Bank of Australia

List of currencies:

Currencies

Security and design features of AUD banknotes:

AUD banknotes

AUD currency on Wikipedia:

Australian dollar

Official Website of Reserve Bank of Australia:

www.rba.gov.au

Commemorative coins:

Commemorative Coins