Australian dollar

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. It is sometimes affectionately called the "Aussie battler"; during a low period (relative to the US dollar) around 2001 and 2002 the currency was sometimes locally called the "Pacific Peso."

Monetary history

In the early years after Australian Federation the British pound sterling was used as the national unit of account. Sterling circulated in conjunction with banknotes and bills of credit issued by private banks. Acceptance of Private Bank notes was not made compulsory by legal tender laws, but they were widely used and accepted. Queensland treasury notes were also in circulation and these were legal tender in Queensland.

Related Topics:
Pound sterling - Unit of account - Legal tender

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In 1910 the federal government passed the "Australian Notes Act" which prohibited the circulation of State notes. Also passed in that year was the "Bank Notes Tax Act" which imposed a tax of ten per cent per annum on "all bank notes issued or re-issued by any bank in the Commonwealth after the commencement of this Act, and not redeemed". Both these acts remain on the statute books and perpetuate the prohibition of private currencies in Australia.

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Also in 1910 a national currency was introduced by the Labor Government of Prime Minister Andrew Fisher. The new national currency was called the Australian pound consisting of twenty shillings each consisting of twelve pence. Monetary policy ensured that the Australian pound was fixed in value to the pound sterling. As such Australia was on the Gold Standard so long as Britain was.

Related Topics:
1910 - Labor - Andrew Fisher - Australian pound - Pound sterling - Gold Standard

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In 1919, the pound sterling was removed from the gold standard. When it was returned to the gold standard in 1926 the sudden increase in its value (imposed by the nominated gold price) unleashed crushing deflationary pressures. Both the initial 1919 inflation and the subsequent 1926 deflation had far reaching economic effects throughout the remnants of the British empire, Australia and the world.

Related Topics:
1919 - 1926

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In January 1931, the Labor Government of Prime Minister James Scullin devalued the Australian pound by 25% against pound sterling as an emergency measure during the Great Depression. £1 sterling became worth £1 5s. 0d. Australian (A$2.50). While this devaluation no doubt removed some of the deflationary pressures introduced five years earlier it would still have been disruptive.

Related Topics:
1931 - James Scullin - Great Depression

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In 1948, when the United Kingdom 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 most of it external trade at the time. One Australian pound went from US$2.80 to US$2.24.

Related Topics:
1948 - United Kingdom - Ben Chifley - Sterling zone

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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:

Related Topics:
February 14 - 1966 - Australian dollar

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