History of pound sterling in Oceania
Sterling was the currency used in many parts of the British Empire, including Australia, New Zealand, and the Pacific islands. After the Napoleonic Wars, Britain expanded its empire and began using sterling coinage in its colonies. In 1825 an official order aimed to make sterling the standard in the colonies, replacing other coins and methods. New South Wales adopted sterling smoothly, and over the nineteenth century the rest of Australia, New Zealand, and many Pacific territories followed.
From the late 1800s until World War I, a kind of monetary union existed in the British Empire, based on the gold sovereign coin. Sterling coins were minted in London and circulated widely, while banknotes were issued by banks in England, Scotland, Ireland, Australia, and New Zealand. In 1910, Australia started its own coinage that looked like sterling and by 1916 began minting Australian versions locally. Paper money in these lands remained in the hands of banks, with the Commonwealth Bank taking on note issuance in Australia.
The Great Depression of the 1930s changed things. The British pound left the gold standard in 1931, and Australia’s pound was fixed at a 25% discount to the pound sterling, effectively tying it to sterling but at a lower value. Other places in the region faced similar pressures. When World War II began, Australia joined the sterling area to protect the pound’s value internationally. Fiji also joined the sterling area during the war.
In 1948 New Zealand’s pound returned to parity with the pound sterling after earlier fluctuations during the war and the postwar period. Australia decimalised its currency in 1966, creating the new Australian dollar, while the pound in the United Kingdom was devalued in 1967; Australia kept its peg to sterling at a fixed rate for a time. In 1971 Australia shifted toward the US dollar, and in 1972 the sterling area was largely dissolved as the pound began to float. Australia and New Zealand ended their formal links to the sterling system in 1972.
Fiji followed a similar path. It used the Fijian pound, issued paper money during the war, and devalued its currency along with Australia and New Zealand in the 1930s. In 1969 Fiji switched to the Fijian dollar, and in 1972 Fiji, like the UK and Australia, moved away from the sterling system as currencies floated more freely.
For much of this period there were three different pounds in the region—the Australian pound, the New Zealand pound, and the Fijian pound—each not equal to the pound sterling. New Zealand did briefly align with the pound sterling again after 1948, but by the early 1970s, the region’s currencies were independent of sterling.
This page was last edited on 3 February 2026, at 07:11 (CET).