Leslie Massey
The Australian dollar is the official currency of Australia and its external territories: Christmas Island, Cocos (Keeling) Islands, Norfolk Island, and others. It is also the official currency of Kiribati, Nauru, and Tuvalu. The Australian dollar is the fifth most traded currency in the world. It was introduced in 1966, replacing the Australian pound, and is subdivided into 100 cents. Australian banknotes are available in $5, $10, $20, $50, and $100 denominations, while coins are available in 5, 10, 20, and 50 cents, as well as $1 and $2. Australia was the first country to print banknotes on polymer plastic, which are harder to counterfeit and more durable than paper notes.
| Characteristics | Values |
|---|---|
| Official Currency | Australian Dollar (AUD) |
| Symbol | $ |
| Coins | 5 cents, 10 cents, 20 cents, 50 cents, one dollar and two dollars |
| Banknotes | $5, $10, $20, $50 and $100 |
| Official Currency Of | Australia, Christmas Island, Cocos (Keeling) Islands, Norfolk Island, Kiribati, Nauru, and Tuvalu |
| Former Official Currency Of | Papua New Guinea (until 1975), Solomon Islands (until 1977) |
| First Introduced | 14 February 1966 |
| Replaced | Australian Pound |
| Conversion Rate | Two dollars to the pound (A£1 = A$2) |
| First Country To | Print notes on polymer plastic |
| Introduced Polymer Banknotes In | 1988 |
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What You'll Learn
Australian dollar history
The Australian dollar (AUD) is the official currency of Australia and its external territories: Christmas Island, Cocos (Keeling) Islands, Norfolk Island, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. It was also the legal tender in Papua New Guinea until 1975 and in the Solomon Islands until 1977.
The Australian dollar was introduced as a decimal currency on 14 February 1966, replacing the non-decimal Australian pound. The conversion rate was set at two dollars for one pound (A£1 = A$2). The $ symbol was intended to have two strokes, but the version with one stroke has always been acceptable.
The first coins introduced in 1966 included denominations of 1 and 2 cents (bronze); 5, 10, and 20 cents (cupronickel); and 50 cents (silver, then cupronickel). In 1968, the 50-cent silver coins were no longer minted as the intrinsic value of the silver content exceeded the face value of the coins. Aluminium bronze 1-dollar coins were introduced in 1984, followed by 2-dollar coins in 1988, replacing the banknotes of that value. The 1- and 2-cent coins were discontinued in 1991 and withdrawn from circulation in 1992, with cash transactions now rounded to the nearest 5 cents.
Prior to 1983, Australia maintained a fixed exchange rate. The Australian pound was initially at par with the British pound from 1910 to 1931, after which it was devalued. From 1946 to 1971, Australia maintained a peg under the Bretton Woods system, which effectively pegged the Australian dollar to sterling until 1967. In that year, Australia did not follow the pound sterling devaluation and instead retained its peg to the US dollar. With the breakdown of the Bretton Woods system in 1971, Australia transitioned to a fluctuating rate against the US dollar. In 1983, the Australian Labor government floated the dollar, allowing its exchange rate to reflect the balance of payments and the supply and demand on international money markets.
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Australian dollar denominations
The Australian dollar is the official currency of Australia and its external territories, including Christmas Island, Cocos (Keeling) Islands, and Norfolk Island. It is also the official currency of Kiribati, Nauru, and Tuvalu. The Australian dollar is commonly abbreviated as AUD, A$ or AU$.
The Australian dollar was introduced as a decimal currency on 14 February 1966, replacing the non-decimal Australian pound. The conversion rate was set at two dollars to the pound (A£1 = A$2). The $ symbol is written before the amount and was originally intended to have two strokes, although the version with one stroke has always been acceptable.
The Royal Australian Mint, located in Canberra, produces Australia's coins. The coins currently in circulation are 5c, 10c, 20c, and 50c, as well as $1 and $2 coins. The 1c and 2c coins were withdrawn from circulation in 1992. Australia's $1 coin is similar in size to New Zealand's $2 coin, and vice versa. Australia's 50-cent coin is one of the largest coins used in the world today.
Australian currency banknotes come in denominations of $5, $10, $20, $50, and $100. The $1 and $2 banknotes were replaced by coins in 1984 and 1988, respectively. Although no longer printed, all previous notes of the Australian dollar remain legal tender. Australia was the first country to print notes on polymer plastic instead of paper.
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Australian dollar compared to other currencies
The Australian dollar is the official currency and legal tender of Australia, as well as its external territories: Christmas Island, Cocos (Keeling) Islands, and Norfolk Island. It is also the official currency of Kiribati, Nauru, and Tuvalu. The Australian dollar was introduced as a decimal currency on 14 February 1966, replacing the non-decimal Australian pound. It is subdivided into 100 cents, and the $ symbol precedes the amount.
The Australian dollar is one of the most traded currencies in the world and was the sixth most-traded currency in the foreign exchange market in April 2022. It is also a reserve currency, with the Central Bank of Russia announcing in 2011 that it would begin keeping Australian dollar reserves. The popularity of the Australian dollar among currency traders is due to a variety of factors, including comparatively high-interest rates, a lack of government intervention in the foreign exchange market, and the general stability of Australia's economy and political system.
The value of the Australian dollar against other currencies has fluctuated over time. 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, thus appreciating in value versus sterling. The highest value of the Australian dollar relative to the US dollar was $0.881 in December 1988, while the lowest value was 47.75 US cents in April 2001. On 15 October 2010, the Australian dollar briefly reached parity with the US dollar, trading above US$1 for a few seconds.
Australia's coins are produced by the Royal Australian Mint, which has been operating since 1965 and has produced over 14 billion circulating coins. Australia was the first country to print notes on polymer plastic instead of paper, with plastic notes being stronger, more durable, and harder to copy.
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Australian dollar as legal tender
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 was introduced as a decimal currency on 14 February 1966, replacing the non-decimal Australian pound. The $ symbol precedes the amount, and the dollar amount goes on the left before a decimal place, with the cent amount on the right after a decimal place.
In addition to being the official currency of Australia, the Australian dollar is also legal tender in its external territories: Christmas Island, Cocos (Keeling) Islands, and Norfolk Island. It was previously the legal tender in Papua New Guinea and the Solomon Islands until 1975 and 1977, respectively, when it was replaced by their local currencies.
The Australian dollar is also legal tender in the independent sovereign states of Kiribati, Nauru, and Tuvalu. These countries do not have their own coins or banknotes, so the Australian dollar is the dominant currency in these countries.
All previous issues of Australian banknotes and coins retain their legal tender status. However, some older notes and coins may no longer be accepted by retailers or the public due to unfamiliarity or suspicion of counterfeiting. Most commercial banks will redeem old Australian banknotes at face value.
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Australian dollar banknotes
The Australian dollar was introduced as a decimal currency on 14 February 1966, replacing the non-decimal Australian pound. It is the official currency in Kiribati, Nauru, and Tuvalu, and is also legal tender in Australia's external territories: Christmas Island, Cocos (Keeling) Islands, and Norfolk Island.
Australia was the first country to print banknotes on polymer plastic instead of paper. Plastic banknotes are stronger, harder to copy, and last longer than paper notes. The $5 note, introduced in 1992, was the first plastic banknote issued by the Reserve Bank of Australia. Today, all Australian banknotes are made of polymer.
Australian banknotes have featured a greater number of women than men, making Australia one of only six countries in the world to do so. The design of the banknotes was slightly changed in 2002 to include the names of the individuals depicted on them under their portraits.
There are currently five denominations of Australian banknotes in circulation: $5, $10, $20, $50, and $100. The $1 and $2 banknotes were replaced by coins in 1984 and 1988, respectively. The $50 note was introduced in 1973, followed by the $100 note in 1984 to address the need for larger denominations due to inflation. The latest versions of the $5 and $10 notes were issued in 2016 and 2017, respectively, while the $50 and $20 notes were introduced in 2018 and 2019. The most recent $100 note was released in October 2020.
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Frequently asked questions
The Australian dollar (AUD) is a freely traded currency, and its value often fluctuates. In December 1988, its highest value relative to the US dollar was US$0.881. In April 2001, its lowest value was 47.75 US cents. On 15 October 2010, the Australian dollar reached parity with the US dollar, trading above US$1 for a few seconds.
The Australian dollar is the official currency of Australia and its external territories: Christmas Island, Cocos (Keeling) Islands, Norfolk Island, Ashmore and Cartier Islands, Australian Antarctic Territory, Coral Sea Islands, Heard Island, McDonald Islands, Kiribati, and Nauru. It is also the official currency of Tuvalu and was the legal tender in Papua New Guinea and the Solomon Islands until 1975 and 1977, respectively.
The Australian dollar is subdivided into 100 cents. Australian coins are available in 5, 10, 20, and 50 cents, and one and two dollars. Australian banknotes are available in 5, 10, 20, 50, and 100 dollars.
