History of the Australian Dollar
With Australian pounds, shillings and pence due to be replaced by a decimal currency system in the 1960s, various names were proposed. In 1965, Prime Minister Robert Menzies, a staunch monarchist, wished to name the new currency the royal. Other suggested names included the Austral, Oz, Boomer, Roo, Kanga, Emu, Digger, Kwid, and Dinkum.
Due to Prime Minister Menzies' influence, the name royal was settled on. The Reserve Bank of Australia prepared and printed trial designs. However, this choice of name was unpopular and was later dropped in favour of the "dollar".
The dollar was introduced on 14 February 1966, replacing the Australian pound (distinct from the pound sterling since 1931) with a decimal currency. The rate of conversion was initially two dollars per Australian pound, or ten Australian shillings per dollar. The exchange rate was pegged to the pound sterling at the rate of 1 dollar = 8 shillings (2.50 dollars = 1 pound sterling). Australia effectively left the Sterling Area when the pound sterling was devalued in 1967 against the U.S. dollar - the Australian dollar did not follow, instead maintaining its peg to the U.S. dollar at the same rate as previously of 1 Australian dollar = 1.12 U.S. dollars.
Following the collapse of the Bretton Woods system in 1971, Australia converted the traditional peg to a fluctuating rate against the US dollar.
In December 1983, the Australian government under the leadership of Prime Minister Bob Hawke floated the Australian dollar, and the exchange rate of the Australian dollar reflected the balance of payments.
The terms of trade does not determine the value of the dollar, but is nonetheless a major component of the balance of payments.
During October 2010, the Australian dollar reached parity with the US dollar - the highest the unit has been since it was floated in December 1983.
Learn about the introduction of
Australia's decimal currency system
Explore the economic factors that are
driving the Australian currency
Reasons behind the dollar's rising value
and what it means for you
See the various coins and notes that are
currently in circulation within Australia