New Zealand Dollar
The New Zealand dollar (NZD), affectionately known as the "kiwi," is the official currency of New Zealand. It is also used in free association with the Cook Islands and Niue, as well as in the Ross Dependency, Tokelau, and the Pitcairn Islands. Managed by the Reserve Bank of New Zealand, the currency serves as a key player in the global foreign exchange market.
Key Facts
- ISO Code: NZD (Numeric: 554)
- Introduction Date: 10 July 1967
- Central Bank: Reserve Bank of New Zealand
- Subunit: 100 cents
- Common Banknotes: $5, $10, $20, $50, $100
- Common Coins: 10c, 20c, 50c, $1, $2
The Transition to Decimal Currency
Before 1967, New Zealand used the New Zealand pound, which operated on the complex £sd system (pounds, shillings, and pence). By the 1950s, this system was viewed as cumbersome, leading the government to investigate a shift to decimal currency. After the Decimal Currency Act was passed in 1964, the nation officially transitioned on 10 July 1967, known as "Decimal Currency Day."
To avoid confusion with the US dollar, alternative names like "fern," "kiwi," and "zeal" were considered. Ultimately, "dollar" was chosen, and a cartoon character named "Mr. Dollar" was used in a massive publicity campaign to help the public adapt. The transition occurred at a rate of two dollars to one pound.
Exchange Rate Evolution
Initially, the New Zealand dollar was pegged to both the British pound sterling and the US dollar. However, following the devaluation of sterling in 1967, the NZD was adjusted to match the value of the Australian dollar. In 1971, it was pegged to the US dollar to maintain a consistent gold value.
From 1973 to 1985, the currency's value was determined by a trade-weighted basket of currencies. On 4 March 1985, the NZD was floated—meaning its value became determined by the open financial markets. Since the float, the currency has fluctuated between approximately US$0.39 and US$0.88, with variations often attributed to differences in interest rates.
Coins of New Zealand
At its launch, coins were available in denominations from 1c to 50c. Early designs were conservative following a public backlash against more modern art concepts. Over time, the currency evolved; the 1c and 2c coins were demonetised on 30 April 1990, leading to Swedish rounding, where cash transactions are rounded to the nearest 5c (and later 10c from 2006).
In 1991, aluminium-bronze $1 and $2 coins replaced the corresponding banknotes. While coins have traditionally featured Queen Elizabeth II, the Reserve Bank announced that coins featuring King Charles III will begin circulating in 2027, starting with the ten-cent coin.
| Value | Composition | Reverse Design | Diameter |
|---|---|---|---|
| 10c | Copper-plated steel | Māori koruru (carved head) | 20.50 mm |
| 20c | Nickel-plated steel | Māori carving of Pukaki | 21.75 mm |
| 50c | Nickel-plated steel | HM Bark Endeavour and Mt Taranaki | 24.75 mm |
| $1 | Aluminium bronze | Kiwi and silver fern | 23.00 mm |
| $2 | Aluminium bronze | Kotuku (great egret) | 26.50 mm |
Banknotes and Security
New Zealand banknotes have undergone several iterations. The original 1967 series featured Queen Elizabeth II and native flora and fauna. In 1992, Series 5 introduced notable New Zealanders on the obverse. By 1999, paper notes were replaced by polymer notes (plastic), which offered increased durability and better security features, such as transparent windows.
The current Series 7 notes, issued between 2015 and 2016, feature a mix of historical figures and natural landscapes:
- $5: Edmund Hillary and Aoraki / Mount Cook
- $10: Kate Sheppard and the Whio (blue duck)
- $20: Queen Elizabeth II and the Parliament Buildings
- $50: Āpirana Ngata and the Kōkako (blue wattled crow)
- $100: Ernest Rutherford and the Mohua (yellowhead)
Global Market Presence
The New Zealand dollar is a recognized currency in international trading. According to the Bank for International Settlements, its share of global foreign exchange market daily turnover grew from 0.2% in 1998 to 2.1% in 2016, ranking it 11th globally at that time. More recent data from 2025 indicates a turnover proportion of approximately 1.5%.
Frequently Asked Questions
What is the "kiwi" in relation to the New Zealand dollar?
"Kiwi" is the popular nickname for the New Zealand dollar, derived from the kiwi bird, which is a national symbol of New Zealand.
When did New Zealand switch to decimal currency?
New Zealand officially adopted decimal currency on 10 July 1967, replacing the New Zealand pound.
What is Swedish rounding?
Swedish rounding is the practice of rounding cash transactions to the nearest 5 or 10 cents, necessitated by the removal of 1c and 2c coins from circulation in 1990.
Who is featured on the current New Zealand banknotes?
Current notes feature prominent figures such as Sir Edmund Hillary ($5), Kate Sheppard ($10), Queen Elizabeth II ($20), Āpirana Ngata ($50), and Sir Ernest Rutherford ($100).
When will King Charles III appear on New Zealand coins?
The first coins featuring King Charles III are expected to be the 2024 ten-cent coins, which will begin circulating in 2027 after existing stocks are exhausted.