The New Zealand Dollar, affectionately known as the Kiwi, has been the currency of the following countries since 1967; New Zealand, the Cook Islands, Niue, Tokelau, and the Pitcairn Islands. 1967 is when the New Zealand Dollar replaced the New Zealand pound, which was pegged to the UK pound. When New Zealand decimalised the currency on July 10th 1967 and introduced the Kiwi, it was still pegged to the Pound sterling, at NZ$2 per 1. Some interesting notes about the Kiwi include that, while it is divided into 100 cents, there is no coin worth less than 5 cents since 1990 when the 1 and 2 cent pieces were removed as legal tender. This means that for cash transactions, values are often rounded to the nearest 5 cents, for example in the US if an item were to cost $9.99, it is likely that in New Zealand it would be rounded to an even $10, or for the purpose of public relations, $9.95 as some retailers in New Zealand will round down
The denominations of New Zealand notes are $5, $10, $20, $50, and $100 dollar bills. Prior to 1991, when $1 and $2 dollar coins were introduced, the $1 and $2 dollar banknotes did exist, but with the introduction of the coins, they were phased out. Another fact worth noting is what the notes are made out of. Since 1999, New Zealand dollars stopped being produced as paper money and were printed on plastic polymer banknotes. Not only do these polymer banknotes last at least 4 times as long, they also have added security features that make them extremely difficult to counterfeit. Furthermore, they do not tear easily, and can actually survive a trip in the washing machine!
The coin denominations in New Zealand are 5 cents, 10 cents, 20 cents, 50 cents, $1, and $2. The $1 coin features a picture of New Zealand’s national bird, the Kiwi, which is where the nickname for the countries currency is derived. The 1 and 2 cent coins were removed from circulation on April 30th 1990, making 5 cents the smallest cash transaction possible as noted earlier. However, checks, electronic transactions, and other modern non-cash transactions do allow for transactions that are not multiples of 5 cents. One of the tools that make transactions in New Zealand a lot easier is the EFTPOS system. EFTPOS stands for Electronic Funds Transfer at Point of Sale, which is a complicated way of labeling a device that essentially allows sales transactions to be directly debited to the bank account of the customer at the point of sale.
Continuing a short timeline of value from the first paragraph, in December of 1971, the NZ dollar was pegged to the US dollar as opposed to the Pound, as it had been since 1967. The Official Rate was US $1.216 with a range of fluctuation at 4.5 %, and it contained an unchanged content of gold. Then from 1973 to 1985, the Kiwi’s value was determined through a trade-weighted basket of currencies. Since 1985, its value has been determined by the financial markets, and one of its strongest components has been the very high interest rate in New Zealand, which right now is the highest among the major currencies at 7.25 %.