AUD

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.

Overview

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coin in current circulation is equal to five cents, the one and two cent coins having been discontinued in 1990-92 and withdrawn from circulation.

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".

On February 14 1966 the Australian Dollar was introduced at a rate of two dollars per pound, or ten shillings per dollar.

All Australian notes are issued by the Reserve Bank of Australia. Australian coins are produced by the Royal Australian Mint.

Monetary history

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 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).

In 1948 when the United Kingdom Government devalued the pound sterling against the US 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 1971 the US government discontinued the practice of managing the value of the US dollar with relation to the value of gold and from this point onward Australia slowly loosened its usage of US dollar as a means of measuring value. However for more than a decade it continued to peg to the US 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 May 2004, the Australian dollar is worth about 70 US cents.

In 1966 the Australian dollar was worth about 980 milligrams of gold. As of May, 2004, the Australian dollar is worth 58 milligrams of gold.

Polymer Banknotes

In 1988, the Reserve Bank of Australia issued a plastic, specifically polypropylene 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.

The coronation of Queen Elizabeth II in 1953 saw the issue of a new series with portrait of prominent persons in Australia's history.

• 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 specimens 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.

Decimal currency

There have been two basic issues of decimal currency. The first paper issues of Australian dollars, issued in 1966, featured portraits of the following persons:

• 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); John Clunies-Ross (reverse)
  
• Hundred dollars (first issued 1984) - Douglas Mawson (front); John Tebbutt (reverse)
  

The coins and plastic notes that became effective throughout the 1980s and 1990s and are currently in use are as follows:

• One dollar (first issued 1984)- a coin featuring five kangaroos and Elizabeth II
  
• Two dollars - a coin featuring an Aboriginal elder and Elizabeth II
  
• Five dollars - Sir Henry Parkes (front); Catherine Helen Spence (reverse) This issue emerged in 2001 and temporarily supplanted another banknote, first issued in 1992, also still in use, which features Elizabeth II on the front and Parliament House on the reverse side
  
• Ten dollars (issued 1993)- Banjo Paterson (front); Dame Mary Gilmore (reverse)
  
• Twenty dollars (issued 1994)- Mary Reibey (front); John Flynn (reverse)
  
• Fifty dollars (issued 1995)- David Unaipon (front); Edith Cowan (reverse)
  
• Hundred dollars (issued 1996) - Dame Nellie Melba (front); Sir John Monash (reverse)
  

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 - a kangaroo and an emu holding 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.

Copper one cent and two cent coins were withdrawn from circulation in 1991. The one cent coin featured a sugar glider and the two cent coin a Money