What currency is used in new zealand

Money in New Zealand: Banks, ATMs, cards & currency exchange

While credit and debit card payments are incredibly popular in New Zealand (almost more so than they’re in Europe), it’s still a good idea to have some cash in your pocket for emergencies.

Heading over to the land of the long white cloud for a holiday?

Here are some tips and tricks on where (and how) to get the best deal on your conversion to New Zealand Dollars.

Currency in New Zealand

The New Zealand Dollar (NZD or NZ$) was originally pegged to the US Dollar; but it has had a floating exchange rate since 1985. As a result, its value fluctuates depending on current supply and demand.

One New Zealand Dollar is made up of 100 cents.

There are a total of five coins and five banknotes currently in circulation. Coins are in denominations of 10c, 20c, 50c, NZ$1 and NZ$2. Banknotes are in denominations of NZ$5, NZ$10, NZ$20, NZ$50 and NZ$100. NZ$20s and NZ$50s are the most commonly used notes, and most ATMs around the country will only dispense amounts in these denominations.

Exchanging currency in New Zealand

You can take as much cash as you like into New Zealand, as long as you declare any amount over NZ$10,000. This means you could theoretically get all the money you need for your trip ahead of time. However, you’re unlikely to get a good deal this way.

It’s often possible to get a much better rate if you exchange money upon arrival in New Zealand. Most major currencies can be easily exchanged, as long as your money is clean and undamaged.

Airports and hotels usually offer the worst exchange rates and charge the highest fees. Banks and foreign exchange kiosks are only slightly better. Your best bet is to withdraw money from an ATM.

Whichever option you choose, it’s a good idea to use this currency converter to compare the rate you’re offered to the mid-market rate. This is the fairest exchange rate possible and any other rate lower will have extra fees buffered into it.

You should also beware of companies that claim they don’t charge any fees or commissions. More often than not, you’ll find that they earn a profit by adding a markup to their exchange rate.

Using travellers’ cheques in New Zealand

Most banks in New Zealand cash travellers’ cheques, provided you present them with suitable proof of ID (your passport should work fine). Banks in New Zealand typically open on weekdays between 9:00am and 4:30pm.

Not all bank branches are open over the weekend, so you should plan ahead or risk being left short of cash. What’s more, travellers’ cheques often have expensive fees and rarely offer attractive rates. Exchanging cash or using an ATM is usually much more convenient and works out to be much cheaper.

Using credit and debit cards in New Zealand

New Zealanders love paying by card even if it’s just for their morning coffee or a newspaper. As a result, credit and debit cards are widely accepted. Restaurants, hotels and even smaller shops take most major credit and debit cards, including Visa, MasterCard and AmEx.

Of course, it’s still a good idea to keep some cash on you for emergencies, or in case there’s a problem with your card. You never know when you might need cash on hand.

Some merchants may also ask you if you’d like the transaction to be performed in your home currency. While this might sound convenient, you should refuse. Transactions in your home currency are worked out using Dynamic Currency Conversion. This basically means you’ll get a made-up (and probably unfavourable) exchange rate instead of the mid-market rate. Always choose to be charged in New Zealand Dollars.

You should also let your bank know that you’ll be abroad, before you travel to New Zealand. If your bank doesn’t recognise your foreign transactions, it will flag them as suspicious and block your card, leaving you without access to your funds.

ATMs in New Zealand

ATMs are plentiful in New Zealand. You’ll find them next to bank branches, along the main shopping streets in most towns and villages and in shopping malls. Most machines in the country accept Cirrus and Maestro (MasterCard), Visa (Plus) and AmEx. You can find the closest ATM by using the following online locators:

ATM transactions are worked out using the mid-market rate. This means you’ll get the fairest exchange rate possible, provided you choose to be charged in the local currency (NZ$). Choose to be charged in your home currency, however, and you’ll be ripped off.

You’ll also need to take ATM fees into account.

Most banks charge a foreign transaction fee and an ATM access fee on every ATM withdrawal. Local ATM operators may also charge fees. Bank of New Zealand reportedly charge the highest ATM fees, so try and avoid that if possible.

Banks in New Zealand

New Zealand’s banking system is modern and highly developed. There are currently 24 registered banks operating in the country.

Here’s a list of the most popular banks in New Zealand:

There are also a number of foreign banks with branches in New Zealand. These include:

It’s worth asking your home bank whether they’ve a partnership with a bank in New Zealand. This might mean you can use their ATMs free of charge or at a reduced cost during your stay.

And if you have access to a bank account in New Zealand, that’s even better.

Many banks in New Zealand don’t charge you when you withdraw from their ATM network, so you can make as many withdrawals as you need completely fee free. Simply use Wise to transfer money into your account at the mid-market rate, and benefit from cheap and easy access to your money for your whole trip.

Inside New Zealand’s Currency

New Zealand’s currency is known as the New Zealand dollar, which is sometimes referred to as the «kiwi.» The currency was decimalized in 1967 and divided into 100 parts or cents. Before that decimalization, the currency was called the New Zealand pound.

Key Takeaways

New Zealand Currency Background

The New Zealand dollar trades under the symbol NZD or NZ$. The New Zealand dollar floated on March 4, 1985, at an initial exchange rate against the U.S. dollar of 44 cents. Since then, the financial markets have determined the currency’s value, with the unit typically ranging between 39 and 88 cents against the greenback.

New Zealand Currency Banknotes

Since 1999, the New Zealand government has produced polymer or plastic versions of the New Zealand dollar, which has made bills more secure against counterfeiting. Also, the new polymer composition has increased the longevity of the banknotes, with polymer bills estimated to last four times longer than regular linen or paper banknotes.

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

Reserve Bank of New Zealand’s Impact on the NZD

The RBNZ is the country’s central bank, responsible for making monetary and fiscal decisions, which in turn, impacts New Zealand’s currency. The RBNZ, currently headed by Adrian Orr, holds monetary policy meetings seven times a year to maintain price stability, set interest rates, and monitor exchange rates.

Factors That Influence the New Zealand Currency

New Zealand is rich in natural resources, with the country’s top industries including agriculture, dairy, forestry, fishing, mining, and tourism. In fact, New Zealand is one of the world’s largest exporters of whole milk powder, meaning if milk prices are rising, the NZD will most likely benefit. As tourism accounts for about 6% of the country’s gross domestic product (GDP), the COVID-19 pandemic has the potential to impact its currency as fewer tourists visit New Zealand.

New Zealand Dollar’s Relationship with Australia

Australia ranks as New Zealand’s second-largest trading partner (behind China), with the neighboring country accounting for 13.6% of New Zealand’s total exports. As a result, the performance of Australia’s economy has a significant impact on the New Zealand dollar.

New Zealand Currency and the Carry Trade

Over the past decade, traders and investors favored the New Zealand dollar as a carry trade currency due to the country having had higher interest rates compared to other developed nations.

The carry trade is one of the most popular trading strategies in the currency market. Executing a carry trade involves nothing more than buying a high-yielding currency and funding it with a low-yielding currency.

To execute a carry trade using the kiwi, traders purchase the New Zealand dollar and sell a lower-yielding currency, such as the Japanese yen, with an objective to profit from the interest rate differential.

More recently, the New Zealand carry trade has become much less appealing as the RBNZ has aggressively reduced interest rates to combat slowing economic growth and subdued inflation.

NZD (New Zealand Dollar)

James Chen, CMT is an expert trader, investment adviser, and global market strategist. He has authored books on technical analysis and foreign exchange trading published by John Wiley and Sons and served as a guest expert on CNBC, BloombergTV, Forbes, and Reuters among other financial media.

What Is the NZD (New Zealand Dollar)?

Key Takeaways

Understanding the NZD (New Zealand Dollar)

Decimalization of the NZD (division into 100 cents) took place in 1967 when the New Zealand dollar replaced the New Zealand pound at a rate of two dollars to one pound. Initially pegged to the United States dollar, NZD went through a series of changes in the fixed exchange rate until March of 1985, when the currency was allowed to float freely.

New Zealand currency has had a long history of over 160 years. In fact, during the 1800s, New Zealand used its coins and banknotes before British currency was even legal currency. However, nothing was made official until 1933, when New Zealand issued their first official coins, based on the British pound, shilling, and pence.

The first coins had pictures of the native birds of New Zealand on the “tails” side, a tradition that has continued, with the British monarch on the head side.

In 1934, the Reserve Bank of New Zealand was established, becoming the only supplier of banknotes. The original notes had a variety of designs, including that of a kiwi, the nation’s Coat of Arms, Maori King Tawhiao, and Fiordland’s Mitre Peak.

It took another 30 years before the Reserve Bank replaced the currency of pounds, shillings, and pence with actual dollars and cents. In the year 1967 alone, the Bank printed 27 million new banknotes and 165 million new coins.

The NZD currency has a long history of colorful and vibrant money and, since its first issuing, has changed its printed design several times. In 1992, the images of Queen Elizabeth on all of the banknotes were altered to reflect prominent citizens of New Zealand such as Edmund Hillary, Kate Sheppard, Apirana Ngata, and Ernest Rutherford, along with local birds and plants on the backs of the notes.

Since 1999, the New Zealand government has produced polymer or plastic versions of the New Zealand dollar, which has made the note more secure against counterfeiting. In addition, the new polymer composition has increased the longevity of the note.

It is estimated that the polymer note lasts four times longer than regular linen or paper notes. Interestingly, the polymer note can go through a washing machine without suffering any material damage. In 2016, the currency had its most recent update, with even more bright colors and updated security features.

NZD/USD

The value of the NZD/USD pair is quoted as 1 New Zealand dollar per X U.S. dollars. For example, if the pair is trading at 1.50, it means that it takes 1.5 U.S. dollars to buy 1 New Zealand dollar.

NZD/USD is affected by factors that influence the value of the New Zealand dollar and/or the U.S. dollar in relation to each other and other currencies. For this reason, the interest rate differential between the Reserve Bank of New Zealand (RBNZ) and the Federal Reserve (Fed) will affect the value of these currencies when compared to each other.

When the Fed intervenes in open market activities to make the U.S. dollar stronger, for example, the value of the NZD/USD cross could decline, due to a strengthening of the U.S. dollar when compared to the New Zealand dollar.

The NZD/USD tends to have a positive correlation to its neighbor, the Australian dollar (AUD/USD).

The New Zealand dollar is considered a carry-trade currency in that it is relatively high-yielding so investors will often buy the NZD and fund it with a lower-yielding currency such as the Japanese yen or the Swiss franc.

Evidence of this was prevalent during the financial crisis when the NZD was one of many high-yielding currencies that fell during 2008 and 2009. Margin trading positions on the NZD/Japanese yen exchange rate rose steadily during 2007-08, as Japanese investors took advantage of the wide differential between New Zealand and Japanese interest rates.

During the turbulence in global financial markets during mid to late 2008, the cumulative net long positions held by Japanese margin traders in the NZD fell by nearly 90%.

Other factors affecting the NZD are dairy prices and tourism numbers. New Zealand is one of the world’s biggest exporters of whole milk powder. This means that if milk prices are on the rise the New Zealand economy is likely to be doing well, which will push up the currency.

Tourism is another staple of the New Zealand economy. So as the number of visitors to New Zealand rises, the economy does well and the currency appreciates.

What Is the Abbreviation for New Zealand Currency?

The abbreviation for the New Zealand currency is «NZD.»

Why Is the NZD So Strong?

The strength of a currency tends to fluctuate so the strength of the NZD may not always be so strong. However, overall, NZD is considered a stable currency due to the strength of the New Zealand economy and its outlook. Tourism is a strong economic driving force for New Zealand, so when tourism is doing well in the country, the currency will tend to be stronger. Other economic factors, such as growth rate, GDP, unemployment, and inflation are strong and, therefore, lead to a strong currency.

Are New Zealand Dollars One of the Best Currencies To Trade?

NZD is one of the most traded currencies in the world, making it a liquid currency in forex markets. New Zealand has a high FX turnover when compared to GDP due to international traders seeking yield, New Zealand having many companies and banks that are owned by international companies, resulting in currency swaps to minimize FX risk, export and imports being a large part of the New Zealand economy, and because New Zealand companies and organizations borrow heavily from international markets.

What Does New Zealand’s Currency Look Like?

Each banknote and coin of New Zealand’s currency looks different. The currency usually has a bird on one side of a banknote or coin as well as an important historical figure of New Zealand. The currency also comes in very bright colors.

Currency in New Zealand – New Zealand dollar NZD

A practical foreign exchange and currency guide to New Zealand

What’s in this New Zealand currency guide:

What currency is used in New Zealand?

The official currency of New Zealand is the New Zealand dollar, with symbol NZ$ and currency code NZD.

Things to know about the New Zealand dollar

The New Zealand dollar is informally called the ‘kiwi’ by foreign exchange traders and analysts due to the kiwi bird, which is native to New Zealand, being something of a national symbol for the country. The kiwi bird is also depicted on New Zealand’s one-dollar coin.

Although the New Zealand dollar is considered one of the eight FX ‘majors’, it is actually only the world’s eleventh most traded currency. Further to the other seven majors – the US dollar, euro, yen, pound, Australian dollar, Canadian dollar and Swiss franc – the New Zealand dollar also falls behind the Mexican peso, the Chinese yuan and the Swedish krona in its share of the foreign exchange market (around 2%). The currencies of China and Mexico are not considered majors due to their emerging market status, while the krona’s market share has only exceeded that of the New Zealand dollar fairly recently (in 2016, according to the Bank for International Settlements) and is therefore not yet considered ahead of New Zealand’s currency.

In the past two decades, the New Zealand dollar’s lowest value against the US dollar occurred in October 2000 when the NZD/USD exchange rate traded at just 0.3901. The currency’s two-decade high occurred in August 2011 when NZD/USD reached 0.8842.

Among the majors, the New Zealand dollar is considered a riskier currency, which means that its value will fall against the larger majors (especially JPY, USD, CHF, GBP and EUR) during periods of economic uncertainty or when global geopolitical risk is elevated, or during bouts of high market volatility.

NZD: Explaining New Zealand’s Currency

Money, they say, makes the world go round. So it’s handy to know as much about the ins and outs of it as possible. With that in mind, take a peak at our guide to the New Zealand dollar; where it came from, the story behind individual notes and what given amounts will buy you.

A brief history

New Zealand hasn’t always been on the dollar. As you might expect, the original currency used on this island nation was the New Zealand pound. The change over took place in 1967, and it must have come as some relief. Up until then the pound was divided into twenty shillings, and each shilling was was divided into twelve pence. It can’t have been much fun working the change out down at the shop. The 1c, 2c, 5c, 10c, 20c, and 50c coins were initially brought out, and up until about 1970 the ten cent coin bore the legend, ‘One Shilling’ on it.

The notes

New Zealand’s currency fits well with the Kiwi mentality in that it depicts that which makes NZ great: its nature. Money is one of those interesting things that we use every day, and yet when we scrutinize it closely, we really don’t know that much about it. For instance, the New Zealand notes also have the faces of prominent Kiwis who have helped shape not just their country, but also the world – but if you had to name them you’d probably draw a blank. Let’s take a closer look.

$5 Note

This is the note on which you’d be most likely to recognise the person. It’s the one and only Sir Edmund Hillary, who is famous for being the first man ever to scale Mount Everest. You’d have to wonder what would get your mug onto a bank note, if being the first human in history to stand on top of the world’s tallest mountain doesn’t merit it.

On the reverse side is the noble and majestic Yellow-eyed Penguin.

$10 Note

Kate Sheppard sits proudly on the ten-dollar note, as she should. This pioneering woman claimed this spot by being at the forefront of the women’s rights in New Zealand. In fact, through her efforts in the name of equality, New Zealand became the first country in the world to give women the right to vote. Fittingly, on the reverse side of this blue note is the New Zealand Blue Duck.

$20 Note

These bright green notes have the dear old queen on. Obviously, this harks back to when New Zealand was a far-flung offshoot of the British Empire. The other side of the twenty-dollar note has a rather diffident looking bird on. This is the New Zealand Falcon. They aren’t a rare bird, but they are certainly something to see when you catch a glimpse of them. They frequently cruise over the highways looking for roadkill, and the bigger ones have been known to carry off newborn lambs.

$50 Note

Āpirana Ngata, the gentleman who sits on the fifty-dollar note was a prominent politician and lawyer. Many regard him as the most effective Maori politician to ever be part of parliament. He was tireless in his efforts to preserve all aspects of Maori culture. On the flip-side of this purple note is the Blue-wattled Crow.

$100 Note

It’s not every day that you hold a nice crisp one hundred-dollar note in your hand, so when you do it’s perhaps fitting that you know a thing or two about it. The person chosen to represent New Zealand’s most valuable note is Lord Rutherford of Nelson, also known down the pub as Ernest Rutherford. This New Zealander basically led the charge when it came to our ideas of modern chemistry. He lived a very notable (sorry) life, but is most famous for his work with the atom. Specifically, it was Rutherford who discovered that the atom was mostly empty and built around a solid, central nucleus. He shares his note with the South Island Lichen Moth.

So, What’s It Worth?

What it all boils down to in the end, of course, is what and how much of it you can get for your money. So, next time you’re in New Zealand and you have a wallet full to bursting with all the different notes, refer back to our guide to see the sorts of things you can purchase.

$5

A fiver is always handy as it’ll get you a coffee or, if you’re in the right spot at the right time, a beer. It’ll also mean that you can legally acquire a pie from a bakery or gas station.

$10

A tenner will pick you up a cheap breakfast at a cafe, but if you want put on breakfast for the family it’ll also get you a small packet of bacon, a dozen eggs, an avocado and some bread and milk. You might also be able to find a campsite for ten bucks a night too.

$20

Twenty bucks will get you twelve ice-cold beers from the supermarket… when they’re on special. It’ll also get you about ten litres of petrol which means you’ll be able to drive to your ten-dollar a night campsite to enjoy your beverages.

$50

If you’re in Auckland a crisp fifty will get you a Skyline Gondola for two. It’ll also get you a couple of mains at a restaurant or into the glow-worm caves at Waitomo.

$100

For one hundred of your hard-earned dollars you can expect to be able to afford a two-person camper for the night, which is a great way to explore this beautiful country. Also, you can buy a basic smartphone!

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