NZD – New Zealand Dollar
Although perhaps most commonly and immediately associated with New Zealand, the New Zealand Dollar also happens to play an integral role in the economy of the Cook Islands as well as the Pitcairn Islands. Affectionately dubbed the “kiwi” within the high risk and tempestuous enclave of foreign exchange trading and currency speculation, the reason for this rather curious choice of moniker is due to the fact that the New Zealand Dollar coin features a kiwi as an emblem on it.
Since the initial founding and colonization of New Zealand as a Commonwealth nation, the currency that was operative was the New Zealand Pound. This currency was widely unpopular and was the target of irritation and annoyance from strongly aggrieved traders. The reason for this was because they found themselves in the unfortunate position of being confused by the archaic and complex calculations required to conduct transactions. With its convoluted and tedious array of shillings, pounds and pennies, this meant that the average person would be forced to carry a hefty amount of coinage around with them at all times.
There were proposals made as early as the 1930’s to switch to the alternate and more efficient system of decimalisation but any other grand and radical plan, progress was stunted and slow to move for a variety of different reasons. It was not until 1957 when a specialist governmental committee was founded with the mandate of determining the benefits and uses of the decimalisation process that the agenda had some hope of being achieved.
The recommendations of the committee were quickly implemented and so in 1964 the Decimal Currency Act was passed which officially abolished the New Zealand Pound system and replaced it with the New Zealand Dollar which was to supersede its predecessor. In order to allow both the general population as well as the financial institutions suitably acclimatise to the proposed changes, the 1964 Act provided a grace period of 3 years. The news, gratefully received, was cause for celebration across the whole of the nation.
The degree of success enjoyed by the New Zealand Dollar has been extremely variable indeed and this is a direct consequence of the fact that it is a currency that is often the victim of currency speculation and trading. The worst effects of this phenomenon were noted in 2009 when the total value of the New Zealand Dollar reached 1 NZD for 0.50 US cents.
When a currency manages to reach such an all-time low, the ramifications of that are as severe as they are predictable. Invariably, in such situations, foreign investment and public confidence in the currency will diminish which means that chances for a recovery are stilted and sluggish at best. However, it would seem that the New Zealand Dollar managed to quickly prove itself as the main exception to this widely held doctrine and this was plainly evidenced by virtue of the fact that only a half year later during its worst performing time, it managed to reach its all time high.
In November 2009, the value of the New Zealand Dollar in comparison to the US Dollar was estimated at 1 NZD for 0.75 US cents.
Unfortunately, New Zealand suffers from something of a flat economy and the consequence of this is that the effects of a recession and inflation are sustained and felt for especially prolonged periods of time. This fact, combined with the extremely fragile and hypersensitive nature of the New Zealand Dollar against the perils of currency speculation has meant that the trading of this currency is and can often be, something of a risky venture.
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