History of the New Zealand Dollar

Abstract

The paper discusses the history of the New Zealand dollar from its introduction in 1967 through various exchange rate regimes - from a fixed exchange rate to becoming a floating currency in 1985. It discusses the bilateral New Zealand dollar exchange rate changes in terms of the US dollar from 1967 to 2021. It also details the history of the Reserve Bank of New Zealand’s interventions in the foreign exchange market. Next, the paper discusses the New Zealand dollar Trade-Weighted Index (TWI) and the New Zealand dollar value determinants, including export commodity prices and relative interest rates. Finally, the paper details the global trading of the New Zealand dollar, the tenth most traded currency globally, including turnover, market participants, and instruments from 1992 to 2019.

Keywords: New Zealand dollar, exchange rate, TWI, Reserve Bank of New Zealand, floating currency, FX trading

JEL Classification: F31, N10