Regional Trading Agreements
Historial Exchange Rate Regime of Asian Countries
 
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  Untitled Document
New Zealand
  The Reserve Bank of New Zealand administers all currency matters. The Reserve Bank has given discretionary authority to the trading (commercial) banks in New Zealand to approve applications for certain remittances of funds overseas.

The currency of New Zealand is the New Zealand Dollar. In 1971, the Effective Rate was created and the currency's link to Pound Sterling was replaced with a pegging to the U.S. Dollar. In 1973, the New Zealand Dollar was placed on a controlled, floating basis. Exchange rate is computed from the value of the New Zealand Dollar, which is determined on the basis of the fixed relationship between the New Zealand Dollar and a basket of currencies representing New Zealand's main trading partners. The weights of the currencies included in the basket are established in accordance with their proportionate share of New Zealand's total current overseas receipts and payments; the weights are adjusted quarterly. From 1979, a crawling-peg system of monthly depreciation adopted.

In March 1985, the New Zealand dollar was floated as part of a broad-based deregulation of financial markets. The rate was determined by the supply and demand in foreign exchange market. The Reserve Bank has not intervened in the foreign exchange market since the float. In mid-October 1993, the New Zealand dollar was worth less on a trade-weighted basis than at the time of the float. In early November, the New Zealand Dollar was trading at 65 U.S. cents (buying rate: US$0.6515 and selling rate: US$0.6520), having appreciated 6% against the U.S. Dollar in the previous 12 months.

Major sources of reference include:
1) World Currency Yearbook (WCY)
2) IMF Annual Report on Exchange Arrangement and Exchange Restriction (IMF)
3) 1993 Country Reports on Economic Practice and Trade Reports
4) 1995 Country Reports on Economic Policy and Trade Practices
   
 
Date
Changes to the exchange rate regime
U.S. Dollar per New Zealand Dollar
21 November 1967The New Zealand Dollar ($NZ) had its Official Rate devalued from US$1.39 to US$1.12, coming after the Sterling devaluation. (WCY 1984, p.558)  
15 August 1971Following the devaluation of U.S. Dollar, the New Zealand Dollar, through its link to the Pound Sterling fixed at $NZ2.1429=£1.00, began to appreciate against the American unit. (WCY 1984, p.558)  
23 December 1971The devaluation of the U.S. Dollar on December 18th, the New Zealand was realigned to a new Official Rate of US$1.216 with a 4.5% fluctuation range, with unchanged gold content.

The currency's link to the Pound Sterling was replaced with a pegging of the New Zealand Dollar to the U.S. Dollar. An Effective Rate of US$1.195 was also created with buying and selling rates of US$1.2017 and US$1.1887 per New Zealand unit. (WCY 1984, p.558) 

 
23 June 1972With the completed failure of Sterling on 23 June 1972, the Sterling Area was liquidated. (WCY 1984, p.558)  
15 February 1973Following the U.S. Dollar devaluation in February 1973, the Official Rate of the New Zealand Dollar was realigned to US$1.351, with unchanged gold content. (WCY 1984, p.558)  
9 July 1973Wellington's currency was placed on a controlled, floating basis with the Effective Rate determined by a basket of currencies of New Zealand's principle trading partners. (WCY 1984, p.558)  
10 September 1973The controlled, floating Effective Rate was revised upward by 10%. (WCY 1984, p.558)  
25 September 1974Wellington, following Australia's lead, slashed the Effective Rate for the New Zealand currency by 9%. (WCY 1984, p.558)  
31 December 1974 1.316 
8 August 1975The buying and selling rates for the U.S. Dollar were US$1.2479 and US$1.2579, respectively, per $NZ1. (IMF 1976, p.337)  
10 August 1975The Reserve Bank of New Zealand adjusts the exchange rate for the U.S. Dollar daily so as to maintain the effective relationship between the New Zealand Dollar and the currencies of the main trading partners. Except for the Australian Dollar and the Pound Sterling, the rate for spot transactions in currencies quoted by the New Zealand commercial banks are based on the closing buying and selling rates of the previous day in London. (IMF 1976, p.334)  
11 August 1975The Effective Rate was depreciated by 15%. (WCY 1984, p.558)

The buying and selling rates for the U.S. Dollar were US$1.0706 and US$1.0606, respectively, per $NZ1. (IMF 1976, p.337) 

 
31 December 1975The buying and selling rates for the U.S. Dollar were US$1.0437 and US$1.0387, respectively, per $NZ1. (IMF 1976, p.334) 1.044 
29 July 1976The New Zealand Dollar was partially devalued, as a tax was placed on travel abroad, thus creating a Resident Travel Rate. (WCY 1984, p.558)   
30 November 1976The New Zealand Dollar was depreciated from US$0.9738=$NZ1 to US$0.9063=$NZ1. (IMF 1977, p.338-339)

The Effective Rate was depreciated by 7%. (WCY 1984, p.558) 

 
19 December 1976The New Zealand Dollar was revalued to US$0.9377=$NZ1. (IMF 1977, p.339)  
31 December 1976The buying and selling rates for the U.S. Dollar were US$0.9550 and US$0.9450, respectively, per $NZ1. (IMF 1977, p.335) 0.950 
30 December 1977 1.020 
31 December 1977The buying and selling rates for the U.S. Dollar were US$1.0247 and US$1.0147, respectively, per $NZ1. (IMF 1978, p.296)  
29 December 1978The buying and selling rates for the U.S. Dollar were $NZ0.9332 and $NZ0.9420, respectively, per US$1. (IMF 1979, p.296) 1.067 
21 June 1979The Effective Rate was downgraded 5% and a crawling-peg system of monthly depreciations adopted.

The Resident Travel Rate was abolished and a flat travel tax imposed. (WCY 1984, p.558)

It was announced that the Reserve Bank would make a small regular adjustments in the rate, each of less than 0.5%, reflecting relative cost and price developments in New Zealand and in its main trading partners. (IMF 1980, p.287)  

 
28 December 1979 0.962 
31 December 1979The buying and selling rates for the U.S. Dollar were $NZ1.0089 and $NZ1.0192, respectively, per US$1. (IMF 1980, p.284)  
30 December 1980 0.962 
31 December 1980The buying and selling rates for the U.S. Dollar were $NZ1.0338 and $NZ1.0446, respectively, per US$1. (IMF 1981, p.298)  
31 December 1981The buying and selling rates for the U.S. Dollar were $NZ1.2057 and $NZ1.2204, respectively, per US$1. (IMF 1982, p.317) 0.824 
June 1982The crawling-peg system of depreciation was abandoned, the Effective Rate to be periodically adjusted. (WCY 1984, p.558)  
22 June 1982It was announced that the Effective (trade-weighted) Exchange Rate index of the New Zealand Dollar would be pegged to an index level of 83.4. (IMF1983, p.344)  
30 December 1982 0.733 
31 December 1982The buying and selling rates for the U.S. Dollar were $NZ1.3559 and $NZ1.3746, respectively, per US$1. (IMF 1983, p.341)  
8 March 1983The New Zealand Dollar was devalued by 6% against its weighted basket of currencies. The middle rate in terms of the U.S. Dollar was consequently changed to US$0.655=$NZ1, representing a depreciation of 8.3% from the middle rate of the previous day. (IMF 1984, p.353)  
8 August 1983The Reserve Bank practice of fixing daily exchange rates for the New Zealand Dollar against the U.S. Dollar was abandoned, allowing the unit to follow international currency movements. (WCY 1985, p.606)  
31 December 1983 0.655 
1984At the end of 1984, almost all foreign exchange controls were in the process of removal. (WCY 1985, p.606)  
31 December 1984The buying and selling rates for the U.S. Dollar were US$0.4723 and US$0.4823, respectively, per $NZ1. (IMF 1985, p.360) 0.478 
4 March 1985The practice of establishing a fixed exchange rate with respect to a trade-weighted basket of currencies was terminated. The exchange rate for the New Zealand Dollar was to be determined on the basis of supply and demand in the foreign exchange market. (IMF 1986, p.382)

The Reserve Bank ceased to quote official buying and selling rates for the New Zealand Dollar, but would enter the market in periods of disturbed conditions. (WCY 1985, p.606)  

 
31 December 1985The buying and selling rates for the U.S. Dollar were US$0.499 and US$0.5, respectively, per $NZ1. (IMF 1986, p.380) 0.499 
1986The $NZ25 tax on foreign travel tickets was abolished. (WCY 1988/89, p.497)

The Effective Rate was eliminated and replaced by the Interbank Rate which was to be determined by supply and demand conditions in the exchange market. The Reserve Bank retained discretionary power to intervene in the market. (WCY 1990/93, p.497) 

 
30 December 1986 0.524 
31 December 1986The buying and selling rates for the U.S. Dollar were US$0.5250 and US$0.5240, respectively, per $NZ1. (IMF 1987, p.366)  
30 December 1987 0.658 
31 December 1987The buying and selling rates for the U.S. Dollar were US$0.6595 and US$0.6585, respectively, per $NZ1. (IMF 1988, p.357)  
30 December 1988The buying and selling rates for the U.S. Dollar were US$0.6288 and US$0.6283, respectively, per $NZ1. (IMF 1989, p.341) 0.628 
1989During 1989, a number of exchange control regulations were abolished. (IMF 1990, p.344)  
29 December 1989The buying and selling rates for the U.S. Dollar were US$0.5947 and US$0.5937, respectively, per $NZ1. (IMF 1990, p.342) 0.597 
1 February 1990The remaining exchange control regulations were abolished, removing the authorization requirement requirement for financial institutions wishing to deal in foreign exchange. (IMF 1991, p.352)  
31 December 1990The buying and selling rates for the U.S. Dollar were US$0.5925 and US$0.5820, respectively, per $NZ1. (IMF 1991, p.350) 0.588 
31 December 1991The buying and selling rates for the U.S. Dollar were US$0.5412 and US$0.5406, respectively, per $NZ1. (IMF 1992, p.349) 0.541 
31 December 1992The buying and selling rates for the U.S. Dollar were US$0.5146 and US$0.5136, respectively, per $NZ1. (IMF 1993, p.366)  
31 December 1993The buying and selling rates for the U.S. Dollar were US$0.5591 and US$0.5580, respectively, per $NZ1. (IMF 1994, p.359)  
31 December 1994The buying and selling rates for the U.S. Dollar were US$0.6415 and US$0.6420, respectively, per $NZ1. (IMF 1995, p.355)  
31 December 1995The buying and selling rates for the U.S. Dollar were US$0.6515 and US$0.6520, respectively, per $NZ1. (IMF 1996, p.350)  

Note:
The third column is the Effective Rate which was extracted from the IMF Annual Report on Exchange Arrangement and Exchange Restriction.

© 2000 The Chinese University of Hong Kong