New Zealand's currency is known as the New Zealand dollar. It's sometimes referred to as the "kiwi." The currency was decimalized in 1967 and divided into 100 parts or cents. The currency was called the New Zealand pound before that decimalization.

New Zealand Currency Background

The New Zealand dollar trades under the symbol NZD or NZ$. It floated on March 4, 1985, at an initial exchange rate of 44 cents against the U.S. dollar. The financial markets have since determined the currency’s value with the unit typically ranging between 39 and 88 cents against the 澳洲幸运5开奖号码历史查询:greenback.

The kiwi also circulates in Tokelau, Pitcairn Islands, Niue, and the Cook Islands in addition to being the official currency of New Zealand. New Zealand bill denominations include $5, $10, $20, $50, and $100. Coins include 10c, 20c, 50c, $1, and $2.

New Zealand Currency Banknotes

The New Zealand government has produced polymer or plastic versions of the New Zealand dollar since 1999. This has made bills more secure against counterfeiting. The polymer composition has also increased the longevity of the 澳洲幸运5开奖号码历史查询:banknotes. Polymer bills are estimated to last four times longer than regular linen or paper banknotes.

Polymer bills can go through a washing machine without suffering any material damage. The Reserve Bank of New Zealand (RBNZ) updated the currency in 2015 with even more bright colors and improved security features.

Reserve Bank of New Zealand's Impact on the NZD

The RBNZ is New Zealand's central bank. It's responsible for making 澳洲幸运5开奖号码历史查询:monetary and fiscal decisions that impact New Zealand's currency. The RBNZ holds monetary policy meetings seven times a year to maintain price stability, set 澳洲幸运5开奖号码历史查询:interest rates, and monitor exchange rates.

Factors That Influence the New Zealand Currency

New Zealand is rich in natural resources. The country's top industries include agriculture, dairy, forestry, fishing, mining, and tourism. New Zealand is one of the world’s largest 澳洲幸运5开奖号码历史查询:exporters of whole milk powder so the NZD would most likely ღbenefit if milk prices rise.

Tourism accounted for about 3% of the country’s 澳洲幸运5开奖号码历史查询:gross domestic product (GDP) in March 2022, a decrease from 5.5% before the COVID-19 pandemic.

New Zealand Dollar's Relationship With Australia

Australia ranks as New Zealand's second-largest trading partner behind China. The neighboring country reports 6.2% of New Zealand imports in 2023. The performa🌜nce of Australia’s economy has a significant impact on the New Zealand dollar as a result.

New Zealand Currency and the Carry Trade

Traders and investors have favored the New Zealand dollar as a carry trade currency beca𒆙use the count🤪ry has had higher interest rates compared to other developed nations.

Traders purchase the New Zealand dollar and sell a lower-yielding currency to execute a carry trade, such as the Japanese yen. The objective is to profit from the interest rate differential. But the New Zealand carry trade has become much less appealing as the RBNZ has aggressively reduced interest rates to combat slowing 澳洲幸运5开奖号码历史查询:economic growth and subdued inflation.

The Bottom Line

New Zealand’s currency is the dollar, more affectionately known as the kiwi. As the country’s central bank, the Reserve Bank of New Zealand (RBNZ) controls most facets of the currency because it sets and monitors excha🎐nge and interest rates. Investors once favored the New Zealand dollar as a carry trade currency but the New Zealand carry trade has become less appealing as the RBNZ has aggressively reduced interest rates to combat slowing economic growth and subdued inflation.