New Zealand Dollar

In New Zealand there is no control on current transactions and capital account controls пo very limited. Currently, there passed pure floating rate regime, and in this regard, the foreign exchange and capital transaction affects a very limited number of legal rules. Currency exchange operations may engage any person, without any permits. Therefore, there are virtually non-existent street speculators currency, all exchange transactions are through banks.

Pounds of kiwi - well, a dollar is better

Go to the decimal nominēšana denznakov became a day for New Zealand. Go to a more convenient decimal system was suggested before World War II. «Imperial» system was quite complicated and difficult to calculate: pounds divided by 20 shillings or 240 pence. However, in 1933, when the country was in the middle of the Great Depression, the shift in the decimal system was too expensive. In 1957, the country has created a special committee to evaluate the pros and cons of a decimal monetary system. The Committee supported the move to decimal denomination, and has prepared this important event for New Zealand. The Government has announced that July 10, 1967 will «Happy D», and launched a massive campaign to prepare the transition from the «empire» of decimal system. At the same time, discussed the name of the new currency unit. In particular, the proposed name «kiwi». In the end, came to the dollar, and the cartoon «Mister Dollar» has become a symbol of the campaign. In the «D» pounds, shillings and pensions gone, dollars and cents became the monetary unit of New Zealand.

In 1989, the Reserve Bank of New Zealand received the right to control the minting of coins. Until that time, despite the bank's sole right to issue banknotes, the control of the issuance of the coins belonged to the New Zealand Treasury. In the early 90-ies were released into circulation banknotes completely new model. A sixth series, issued in 1999-2000, was a polymer. Now all the New Zealand bank notes are printed on polypropylene polymer materials. First of money printed on paper made from cotton. The Australian experience has shown that polymer banknotes live four times longer than paper and is better protected against forgery. Polymers more environmentally friendly, end-of-life bills were recycled.

Running with the barriers to inflation

Fig. 1. Course «kiwi-dollar» to the dollar (1986-2002 gg.).

When you transfer money to New Zealand (or from) there are no rules forbidding. However you want to declare imported currency and to abide by UN rules. Some transactions may be subject to more careful consideration. Transportation of cash amounting to more than 10 thousand New Zealand dollars must be declared at customs when entering or leaving the country. This rule is intended to help in the fight against money laundering and is not unique (a similar requirement, for example, in Australia).

In the 70-80-years in New Zealand experienced relatively high inflation. But since 1991, she kept at a fairly low and stable (Fig. 1-3).

Source: Reserve Bank of New Zealand.
Fig. 2. Annual growth in the consumer price index (%).

Responsibility for the control of inflation lies with the Government to the Reserve Bank. The Bank strives to keep inflation within 0-3%, starting from the consumer price index, published in the Official Statistics New Zealand. More details of the policy stated in a contract between the bank and the government, which is the name of «agreement on policy objectives». The Reserve Bank is concerned not only so as not to allow inflation to exceed 3%-ing the barrier. It also has ensured that there was no deflation, as the latter may lead to the braking of economic growth and create new disparities. Just as in Australia, the Reserve Bank of New Zealand conducts monetary policy to maintain price stability by influencing the rate of interest. In setting the official interest rate, the bank has an impact on all short-term interest rates, floating rate mortgages, etc. It is short-term interest rates have a significant impact on the level of economic activity in the country and, consequently, inflation.

Source: Reserve Bank of New Zealand.
Fig. 3. The consumer price index in New Zealand.

The Reserve Bank is reviewing the official rate of 8 percent every year. This happens when quarterly issues «Statements on Monetary Policy», and between issues. However, in exceptional circumstances, the Reserve Bank may decide to change interest rates and out of this calendar. Regulation of interest rates as a means of implementing monetary policy was adopted in March 1999. Compared with the previously applied methods, the system is easier to execute, and it is easier to understand. Prior to this, the main tool the Reserve Bank of New Zealand's implementation of monetary policy has been monitoring the amount of cash available to banks in accordance with the price (ie interest).