On February 14, 1966, Australia replaced its existing currency with the new Australian dollar, which remains in use today. The transition was known as decimalisation, reflecting the shift to a system built around multiples of ten, with one dollar divided into one hundred cents. The government selected that specific date to help manage the changeover smoothly and backed it with an extensive public education campaign that included television advertisements, printed pamphlets, and even a dedicated song to help people understand the new money.

Before the dollar arrived, Australians used the Australian pound, which followed the old British model of pounds, shillings, and pence. Under that system, one pound contained twenty shillings and each shilling contained twelve pence, which made everyday arithmetic unnecessarily cumbersome. The pound had served as Australia’s official national currency since 1910, shortly after the country became a federation, and its coins and banknotes bore a close resemblance to their British counterparts.

Going back further, before the Australian pound was established, no single national currency existed at all. Individual colonies used their own combinations of British coins, Spanish silver dollars, other foreign coinage, and private banknotes issued by local banks. The value of these instruments varied from one colony to another, creating persistent confusion.

One inventive response to the chronic money shortage came in 1813, when Governor Lachlan Macquarie had the centers punched out of Spanish silver dollars. The outer ring became known as the holey dollar and the small central disc became the dump, effectively turning one coin into two. The approach also discouraged the coins from leaving the colony. It was a clever workaround but ultimately only a temporary measure in a messy system.

The deeper motivation for abandoning the pound was practical. The British-style system was simply too awkward for modern commerce and record-keeping, and most of Australia’s trading partners had already adopted decimal currencies. Switching to the dollar made international business considerably more straightforward. When the changeover took place, the conversion rate was set at two Australian dollars to one Australian pound, meaning one shilling from the old system translated cleanly into ten cents in the new one.

The Australian dollar is issued by the country’s central bank, the Reserve Bank of Australia. The RBA is responsible for producing both the banknotes but not the coins circulating throughout the country. The Royal Australian Mint does the coinage.

The dollar today is not backed by gold or any other physical commodity. Its value rests instead on confidence in the Australian economy, making it a fiat currency in the same way as most modern national currencies. The RBA holds very little gold in reserve; the bulk of its foreign reserves consist of other fiat currencies.

The value of the Australian dollar is set by global supply and demand, a system adopted in December 1983. Before that point, the currency’s value was either fixed by the government or pegged to other currencies such as the British pound or the US dollar. Since the float, its worth fluctuates according to market forces, with Australia’s commodity exports, particularly iron ore and coal, exercising significant influence.

Based on data from around August 2026, one Australian dollar is worth approximately 0.70 to 0.71 US dollars, meaning it takes roughly 1.42 Australian dollars to purchase one US dollar. Against the British pound, one Australian dollar buys around 0.52 pounds, with one pound equivalent to approximately 1.92 Australian dollars. Against the euro, one Australian dollar is valued at around 0.61 euros, with one euro buying approximately 1.63 to 1.64 Australian dollars. All of these figures shift continuously in response to market conditions, interest rates, and economic developments.

Australian coins often carry images of native animals rather than human figures. The one-dollar coin, for instance, features a group of kangaroos in a design created by Stuart Devlin in 1984.

Banknotes take a different approach, featuring notable historical figures. The five-dollar note has historically carried the portrait of the reigning British monarch, most recently Queen Elizabeth II. The fifty-dollar note honors David Unaipon, an Aboriginal writer and inventor, alongside Edith Cowan, the first woman elected to an Australian parliament. The one-hundred-dollar note features soprano Dame Nellie Melba and General Sir John Monash, a distinguished military commander, engineer, and civic leader. The ten-dollar note has featured poet A.B. Paterson, and the twenty-dollar note has honored aviator Sir Charles Kingsford Smith.

Australia was a genuine pioneer in banknote technology, producing the world’s first complete series of polymer banknotes. The innovation was developed jointly by the Reserve Bank and the CSIRO as a countermeasure against forgery, with the added benefit that plastic notes last considerably longer than paper ones.

The notes are manufactured at a high-security facility in Craigieburn, Victoria, operated by Note Printing Australia, a wholly owned subsidiary of the Reserve Bank. Production begins with plastic pellets that are melted and blown into a large bubble to produce the polymer film from which the notes are made.

Security features are built into the notes at multiple levels. Raised printing produced under high pressure gives the notes a tactile quality, and additional raised bumps along the edges allow people with vision impairments to identify different denominations by touch.

The one-dollar coin is more recent than many people assume. It was introduced on May 14, 1984, nearly twenty years after the shift to decimal currency, and was created to replace the one-dollar note, which wore out too quickly to be practical.

China’s economic health is another significant factor. As Australia’s largest trading partner, the performance of the Chinese economy directly affects demand for Australian exports and, in turn, demand for Australian dollars.