What’s the Currency Used in Australia?

The official currency of Australia is the Australian Dollar, abbreviated as AUD and represented by the symbol $. It’s not just Australia that uses it; the Australian Dollar also serves as the official currency of Christmas Island, Cocos (Keeling) Islands, Norfolk Island, and independent Pacific island states such as Kiribati, Nauru, and Tuvalu. Understanding the Australian Dollar is key for anyone planning a trip Down Under or engaging in international business with Australia.

A Deep Dive into the Australian Dollar

The Australian Dollar is more than just a medium of exchange; it’s a symbol of the nation’s economic identity and a reflection of its unique culture. Let’s delve into its history, features, and significance.

History and Evolution

Prior to 1966, Australia used the Australian Pound, which was pegged to the British Pound Sterling. However, the decimalisation movement gained momentum, culminating in the introduction of the Australian Dollar on 14 February 1966. This shift to a decimal currency simplified financial transactions and aligned Australia with the global trend. The choice of the name “Dollar” was contentious, with other options like “Royal” and “Austral” being considered, but the ease of understanding and its international recognition ultimately prevailed.

Design and Features

The Australian Dollar is renowned for its polymer banknotes, introduced progressively from 1988. This pioneering use of polymer, developed by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Reserve Bank of Australia, made Australian banknotes significantly more durable and resistant to counterfeiting than traditional paper currency. The banknotes feature various prominent Australians, historical figures, and iconic cultural motifs. Each denomination boasts a distinct color and tactile feature to assist the visually impaired.

• $5 Note: Depicts Queen Elizabeth II and Parliament House.
• $10 Note: Features poets A.B. “Banjo” Paterson and Dame Mary Gilmore.
• $20 Note: Shows businesswoman Mary Reiby and Reverend John Flynn, founder of the Royal Flying Doctor Service.
• $50 Note: Displays David Unaipon, an Aboriginal inventor and writer, and Edith Cowan, the first woman elected to an Australian Parliament.
• $100 Note: Portrays Dame Nellie Melba, an opera singer, and Sir John Monash, a military commander.

Coins of the Realm

Australian coins also possess unique characteristics. The circulating coins consist of:

• 5c (five cents)
• 10c (ten cents)
• 20c (twenty cents)
• 50c (fifty cents)
• $1 (one dollar)
• $2 (two dollars)

Historically, 1c and 2c coins were also in circulation but were withdrawn in 1991 due to their low purchasing power and high production costs. The designs on the coins feature Australian fauna, the Commonwealth Star, and portraits of the British monarch.

The Reserve Bank of Australia

The Reserve Bank of Australia (RBA) is the country’s central bank and is responsible for issuing banknotes and coins, maintaining the stability of the financial system, and conducting monetary policy. The RBA plays a crucial role in managing the value of the Australian Dollar in the international market.

Frequently Asked Questions (FAQs) About the Australian Dollar

Here are some frequently asked questions about the Australian Dollar, providing further insights and practical information.

1. What is the ISO code for the Australian Dollar?

The ISO 4217 currency code for the Australian Dollar is AUD. This code is used internationally to identify the currency in financial transactions and currency exchange rates.

2. Where can I exchange currency for Australian Dollars?

You can exchange currency for Australian Dollars at banks, currency exchange bureaus, and some airports. It’s wise to compare exchange rates and fees across different providers to get the best deal.

3. Are credit cards widely accepted in Australia?

Yes, credit cards are widely accepted in Australia, particularly Visa and Mastercard. American Express is also accepted in many establishments, but smaller businesses might prefer or only accept Visa and Mastercard.

4. What are the current exchange rates for the Australian Dollar?

Exchange rates fluctuate constantly based on global market conditions. You can find current exchange rates on financial websites like Google Finance, Bloomberg, Reuters, and XE.com.

5. Is it better to exchange money before I arrive in Australia or after?

This depends on your home country and the exchange rates offered. Generally, it’s advisable to compare rates both at home and in Australia. You might find better rates upon arrival, particularly at larger banks in major cities. However, exchanging a small amount before arrival can be useful for initial expenses.

6. Are there any fees associated with using ATMs in Australia?

Yes, most ATMs in Australia charge fees for withdrawals, especially if you’re using a card from a foreign bank. Check with your bank about international transaction fees to avoid unexpected charges.

7. What should I do if I encounter a counterfeit Australian Dollar note?

If you suspect you have a counterfeit note, do not attempt to use it. Report it immediately to the Australian Federal Police (AFP) or your local police station. Providing as much detail as possible about how you obtained the note will assist in their investigation.

8. How do the polymer banknotes help prevent counterfeiting?

Polymer banknotes are significantly harder to counterfeit than paper notes due to their unique properties. They feature complex security features such as a transparent window, raised printing, and microprinting that are difficult to replicate.

9. Why did Australia switch to polymer banknotes?

Australia switched to polymer banknotes primarily to enhance security and durability. Polymer notes last longer, are more resistant to water and tearing, and are more difficult to counterfeit.

10. Are there any restrictions on bringing Australian Dollars into or out of the country?

You can bring any amount of currency into or out of Australia. However, if you are carrying AUD 10,000 or more (or its foreign currency equivalent), you must declare it to the Australian Customs and Border Protection Service.

11. How has the value of the Australian Dollar performed historically?

The value of the Australian Dollar is influenced by factors like commodity prices (particularly iron ore and coal), interest rates, economic growth, and global market sentiment. Historically, it has been subject to fluctuations, reflecting Australia’s position as a major commodity exporter and its exposure to global economic trends.

12. What is the impact of the Australian Dollar’s value on the Australian economy?

A weaker Australian Dollar can boost exports by making Australian goods and services more competitive internationally. It can also increase tourism by making Australia a more affordable destination. Conversely, a stronger Australian Dollar can make imports cheaper and reduce inflationary pressures. The Reserve Bank of Australia carefully monitors the currency’s value and its impact on the economy.

In conclusion, the Australian Dollar is a sophisticated and resilient currency that reflects Australia’s unique economic and cultural identity. Understanding its history, features, and the factors that influence its value is essential for anyone engaging with Australia, whether as a tourist, investor, or businessperson. Knowing the practical aspects of using AUD can greatly improve your experience when travelling or working with Australia.