Economics

What Is the Currency of Tonga?

The official currency of Tonga is the Tongan pa'anga.

What Is the Currency of Tonga?

Tonga is a Polynesian sovereign state comprising of 169 Islands, 36 of which are in inhabited. The country has a surface area of 270,000 square miles and is one of the least populated countries on the globe with a population of 103,000 people, 70% of whom live in the Tongatapu Island. Tonga’s economy is mainly a non-monetary sector and is heavily dependent on revenue transmitted by citizens living abroad. The royal family heavily dominates the banking and investment sector. In fact, in 2008, Forbes listed Tonga as the most corrupt country in the world. In 2011, the country opened its doors to investors, making it a preferred investment destination. Due to the expansion of foreign direct investment (FDI), the banking sector has expanded to provide credit to investors. The National Reserve Bank of Tonga responsible for promoting financial stability in the country mints and distributes the Tongan pa’anga as the official currency, which is denoted as TOP and symbolized as T$. The pa'anga is is subdivided into units called seniti.

History of the Tongan Pa’anga

The word pa’anga is a native term that refers to a bean-like vine bearing large pods with reddish brown seeds. The seeds were incorporated into dancing costumes for the kailao dance as well as acting as playing stones. In 1806, Tongans attacked a Port-au-Prince ship that was full of round pieces of metal, which were meant to act as money. However, the official introduction of the Tongan Pa’anga was in 1967, when they were introduced to replace the Tongan pound at the rate of 1 pound for 2 pa’anga. What is unique about the currency is that it is usually pegged to various world currencies including the Australian, New Zealand, and US dollars, and the Japanese yen.

Banknotes

In 1967, Tongan banknotes were introduced in denominations ½, 1, 2, 5 and 10 pa’anga, and included the portrait of Queen Salote Tupou III. In 1985, notes of 20 and 50 pa’anga were introduced. In 1992, the National Reserve Bank of Tonga was granted the mandate of issuing money introducing a new series of banknotes in 2008. The notes are printed in Tongan language and bear the portrait of the emperor on the obverse, while the reverse is printed in English, with distinctive landmarks of Tonga, including the Haʻamongaʻa Maui Trilithon, burial mounds, and school going students, the royal palace, a humpback whale, the Tongan Development Bank, rugby players and the Port Vavaʻu. The latest issue of the Tongan pa’anga was done in 2015 in denominations ranging from 2 to 100 pa’anga, and bears the portrait of Tupou VI, the current king of Tonga.

Coins

The first coins were issued in 1967 in denominations of 1, 2, 5, 10, 20 and 50 senitis, as well as 1 and 2 pa’anga, which were made of copper and cupro-nickel, respectively. Currently, only the 1, 2, 5, 10, 20 and 50 seniti are in circulation, with the 1 and 2 senitis losing value and are no longer in use. The newest issue of the coins, done in 2015, now features the portrait of king, replacing the previous theme revolving around food and agriculture production.

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