Lexi Webster
Australia's basic unit of money is the Australian dollar (AUD), which 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. The Australian dollar was introduced in 1966 to replace the Australian pound, which was the currency of Australia from 1910 until 1966. The Australian dollar is subdivided into 100 cents, and Australian coins are issued in denominations of 5c, 10c, 20c, 50c, $1, and $2. Australian banknotes are available in denominations of $5, $10, $20, $50, and $100.
| Characteristics | Values |
|---|---|
| Name | Australian dollar |
| Symbol | $ |
| Code | AUD |
| Subunit | cent |
| Subunit Symbol | c |
| Coins | $1 and $2; 5c, 10c, 20c, and 50c |
| Banknotes | $5, $10, $20, $50, and $100 |
| Issuing authority | Reserve Bank of Australia |
| Countries using | Australia, Kiribati, Nauru, and Tuvalu |
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What You'll Learn
Australia's currency history
Australia's basic unit of money is the Australian dollar, which is the country's official currency and legal tender. It is subdivided into 100 cents. The Australian dollar is used in all of Australia's external territories, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu.
Before the colonisation of Australia by Europeans, Aboriginal Australian communities traded using items such as tools, food, ochres, shells, raw materials, and stories. There is no evidence of the use of currencies. After colonisation in 1788, New South Wales became a British colony and was provided with English currency for circulation. However, the supply was insufficient, and alternative forms of exchange were often used.
In 1813, to discourage the use of Spanish dollars, the centres of the coins were cut out, creating Australia's first form of coinage. These coins became known as 'holey dollars', and the cores were called 'dumps'. In 1825, the government imposed the Sterling standard, and British coins began to be minted in Australia.
In 1910, a national Australian currency was created—the Australian pound. It was divided into 20 shillings, with each shilling divided into 12 pence, making a pound worth 240 pence. The Australian pound was fixed in value to the Pound Sterling and used a gold standard.
In 1937, a banking royal commission recommended that Australia adopt a decimal system based on the division of the Australian pound into 1,000 parts. This proposal was not accepted. However, in 1960, a Decimal Currency Committee was appointed, and in 1961, the Menzies government announced its support for decimalisation.
Finally, on 14 February 1966, the Australian dollar was introduced as a decimal currency, replacing the Australian pound. The conversion rate was set at two dollars to the pound. The Australian dollar has since become a widely traded currency in the foreign exchange market. In 1983, the Australian Labor government floated the dollar, allowing its value to be determined by market forces.
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Australian dollar's global rank
The Australian dollar (AUD) is the official currency and legal tender of Australia, including all of its territories, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. The Australian dollar is a reserve currency and one of the most traded currencies in the world. In April 2022, it was the sixth most traded currency in the foreign exchange market and, as of Q1 2024, the sixth most-held reserve currency in global reserves.
The value of the Australian dollar is influenced by various factors, including commodity prices, such as minerals and agricultural products, and changes in 'risk sentiment' or the amount of risk investors are willing to take. The Australian dollar's value also tracks movements in other financial markets, such as global equity markets. During the mining investment boom from the mid-2000s to 2013, the Australian dollar appreciated significantly, reaching a record high of A$1.10 against the US dollar in 2011.
The Australian dollar was introduced on February 14, 1966, replacing the non-decimal Australian pound at a conversion rate of two dollars to the pound. In 1967, Australia effectively left the sterling area when the Australian dollar retained its peg to the US dollar at A$1 = US$1.12. Australia has a floating exchange rate, allowing the market to determine the Australian dollar exchange rate based on demand and supply.
The strength of the Australian dollar, along with property ownership levels and a robust labour market, has contributed to Australia's high ranking in wealth per adult. According to the 2011 Credit Suisse Global Wealth report, Australia's wealth per adult had quadrupled over the previous decade, with a median wealth of US$222,000 per adult. In 2013, Credit Suisse ranked Australia as the second-wealthiest country in terms of average wealth per adult.
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Australian dollar's value
The Australian dollar (AUD) is the official currency and legal tender of Australia, including its external territories, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. The Australian dollar is subdivided into 100 cents and uses the dollar symbol ($) and the cent symbol (¢). AUD is the currency code for the Australian dollar, and it is also abbreviated as A$ or sometimes AU$ to distinguish it from other dollar-denominated currencies.
The Australian dollar was introduced as a decimal currency on 14 February 1966, replacing the non-decimal Australian pound, with a conversion rate of two dollars to the pound. In 1988, banknotes were converted to polymer, a technology originally developed in Australia to prevent counterfeiting. The Australian dollar is known as a commodity currency due to its substantial raw material exports, and its value is affected by China and other Asian import markets.
The value of the Australian dollar has fluctuated over the years relative to other currencies. In December 1988, its highest value relative to the US dollar was $0.881. The lowest value of the dollar after it was floated in 1983 was 47.75 US cents in April 2001. On 15 October 2010, the Australian dollar reached parity with the US dollar, trading above US$1 for a few seconds.
In 2016, the Australian dollar was the fifth most traded currency in world foreign exchange markets, accounting for 6.9% of the world's daily share. As of 2022, it was the sixth most-traded currency in the foreign exchange market and the sixth most-held reserve currency in global reserves.
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Australian coins
Australia's basic unit of money is the Australian dollar, which is divided into 100 cents. Australian coins are medallically oriented, as are most other Commonwealth coins, Japanese yen coins, and euro coins.
The history of Australian coins dates back to the early days of the colonies. Initially, foreign and British currencies were used, including the English pound and Spanish dollars. In 1797 and 1799, the first British coins, known as "Cartwheel pennies", were officially exported to the colonies, featuring Britannia on one side and King George III on the other. In 1812, Governor Lachlan Macquarie of New South Wales acquired Spanish dollar coins, and to prevent their export, he had holes cut in the middle, creating the "'Holey dollars' valued at five shillings, and the "dumps", the centre pieces, valued at 15 pence.
In 1825, British currency became the official currency of the Australian colonies, and British coins were minted in Australia. These silver and bronze coins remained in use until 1910, when Australian silver coins were introduced, including florins, shillings, sixpences, and threepences. Australian pennies and half-pennies were circulated the following year.
On 14 February 1966, Australia adopted a decimal currency, replacing the Australian pound with the Australian dollar. At this time, 1, 2, 5, 10, 20, and 50 cent coins were issued. The $1 and $2 coins were introduced later, in 1984 and 1988, respectively. The one- and two-cent coins were discontinued in 1990 and withdrawn from circulation in 1992.
Today, Australian coins in circulation include the 5, 10, 20, and 50 cent coins, as well as the $1 and $2 coins. The $1 and $2 coins are gold-coloured, with the $2 coin being smaller than the $1 coin. The Royal Australian Mint in Canberra produces these coins, which feature a depiction of the monarch on the obverse. Following the death of Queen Elizabeth II, new coins began to be minted with King Charles III's image in December 2023, with the $1 coin being the first to change over.
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Australian banknotes
The Australian dollar (AUD) is the official currency of Australia, including all of its territories, as well as three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. It is subdivided into 100 cents.
The Australian dollar was introduced as a decimal currency on 14 February 1966, replacing the Australian pound. The $1 and $2 notes were replaced by coins in 1984 and 1988, respectively. Today, there are five denominations of Australian banknotes in circulation: $5, $10, $20, $50, and $100.
The individuals depicted on the currency have changed over time, and Australia is now one of the few countries that depict a greater number of women than men on their banknotes. The Reserve Bank has a program in place to upgrade the security of Australia's banknotes, and older banknotes no longer in circulation can be exchanged.
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Frequently asked questions
The Australian dollar (AUD) 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.
The Australian dollar is commonly abbreviated as the dollar or the Aussie dollar. The currency code for the Australian dollar is AUD, and the currency symbol is $.
Australian coins are available in 5 cents, 10 cents, 20 cents, 50 cents, one dollar, and two dollars. The $1 and $2 coins are gold-coloured, and the $2 coin is smaller than the $1 coin. Australian banknotes are available in $5, $10, $20, $50, and $100 denominations.
