New Zealand dollar

The New Zealand dollar (ISO 4217: NZD, sometimes NZ$ and often informally known as the Kiwi (dollar)) is the official currency of New Zealand, the Cook Islands, Niue, Tokelau, and the Pitcairn Islands. It was introduced in 1967 to replace the New Zealand pound, when the country decimalised its currency.

Coins and Notes

Lack of 1 and 2 cent coins

Prior to 30 April 1990 one and two cent coins were legal tender, but were withdrawn amid some controversy. However, modern non-cash transactions (such as electronic transactions and cheques) need not be multiples of five cents, and New Zealanders rapidly adapted to the change.

Related Topics:
30 April - 1990 - Legal tender - Cheque

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The lack of one and two cent coins means that cash transactions are normally rounded to the nearest five cents. Some larger retailers (notably one supermarket chain), in the interests of public relations, elected to round the total price down (so that $4.99 becomes $4.95 instead of $5.00). Alternatively, many retailers rounded all their prices to the nearest five cents to avoid the issue entirely ? so a New Zealand shopper often encounters products for sale at prices like $4.95.

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However, a shopper can spend less than five cents by using the electronic EFTPOS system, which nearly all retailers provide.

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Limits on coins allowed to be used

Gold coins may be used up to $100, and silver coins up to $5.

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Polymer banknotes

New Zealand notes, since 1999, have been produced as plastic polymer banknotes instead of conventional paper. There was a slight controversy, but this move was mostly met with curiosity by the public. Such polymer notes have many advantages, notably a photocopy can effortlessly be distinguished from the real thing by touch, and many Kiwis have been thankful that the notes go though a washing machine with no ill effects. The notes are also difficult to tear without the aid of a cutting tool. Initial versions of the polymer $5 note had issues with the ink wearing and aging prematurely, but this was rectified in later production runs.

Related Topics:
1999 - Plastic - Polymer banknotes - Kiwi - Washing machine

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The Reserve Bank expects polymer notes to last at least four times as long as the old bank notes. They also have vastly improved security features and are very difficult to counterfeit.

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Damaged Notes

The Reserve Bank accepts all New Zealand currency for payment at face value. This applies to all demonetised or withdrawn currency, however such currency need not be accepted by money changers as this is no longer legal tender. All decimal notes are legal tender except $1 and $2 notes as these have been withdrawn.

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Damaged notes are still useable so long as they are recognisable. In particular, the legibility of the note's serial numbers is important. The Reserve Bank website notes that as a rule of thumb if there is more than half a bank note they will pay its full value. To receive payment people have to turn in the note to the Reserve Bank in Wellington or any bank. Explaining Currency

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Upcoming Changes

On 11 November 2004 the Reserve Bank announced that it proposed to take the 5c coin out of circulation and to make the current 50, 20 and 10 cent coins smaller and use plated steel to make them lighter. The reasons given were:

Related Topics:
11 November - 2004 - Plated steel

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• The 5c coin is now worth less than half what a cent was worth back in 1967, when New Zealand decimalised its currency.
• Surveys had found that 50, 20 and 10 cent coins were too large and could not be easily carried in large quantities. The current 50c coin, with a diameter of 3.2 centimetres, is one of the largest coins in circulation worldwide.
• The size of the 10c piece is too close to that of the dollar - so close, in fact, that it has been possible on occasion to put two 10c pieces in a parking meter together and receive a dollar's worth of parking time. (Naturally, this can also backfire and jam the meter.)

After a three-month public submission period that ended on 4 February 2005, the Reserve Bank announced on 31 March it would go ahead with the proposed changes. The changeover period, lasting no more than three months, starts in July 2006.

Related Topics:
4 February - 2005 - 31 March - July - 2006

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In August 2005, the Royal Canadian Mint, who has minted Canadian coins in plated steel in the past, was selected by the Reserve Bank to make the new coins.

Related Topics:
August - 2005 - Royal Canadian Mint

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