What is the Currency of Vanuatu?
Vanuatu is a country located in the South Pacific Ocean. It is made up of about 80 islands which cover an area of 1,300 kilometers. The capital and economic center of Vanuatu is Port Vila which is located on Efate Island. The currency used in Vanuatu is the vatu. It is abbreviated as VUV and the sign used to refer to it is VT. The Reserve Bank of Vanuatu is responsible for the issuance and regulation of the vatu in the Vanuatu economy.
History of the Vanuatu Vatu
Before 1981, the currency used in Vanuatu was New Hebrides franc. One year after the nation received independence, this currency was replaced by the vatu at par. The vatu was issued without any sub-unit with 1 vatu being its smallest unit. The circulation of the Australian dollar ceased right after the introduction of the vatu. Currently, the value of the vatu exhibits an inflation rate of 3.9%.
50 vatu was the first coin to be issued after Vanuatu gained its independence in 1981. It was followed by 1, 2, and 5 vatus which were struck in aluminium bronze. Similar to the 50 vatu, the 10 and 20 vatu coins were also struck in cupro-nickel. The vatu coins had features of the Vanuatu coat of arms, traditional items of value, and pig’s tusks. Due to the Vanuatu colonial history, the sizes of the coins resemble that of their colonial rulers who were the French and British. For instance, the 100 coin which replaces the 100 note in 1988 resembles the British 1 pound coin in thickness and size. The Reserve Bank of Vanuatu stopped issuing the 1 and 2 vatu coins in 2011. As a result, prices are now rounded off to the nearest 5 vatu. In 2015, Vanuatu went through a coinage reform which saw minting of a new series of coins by the Royal Australian Mint. Consequently, the coins which are used presently are denominated as 1, 2, 5, 10, 20, 50, and 100 vatus.
The Central Bank of Vanuatu issued the first notes in March of 1982. The denominations introduced were 100, 500, and 1,000 vatu. In 1989, the 5,000 vatu was introduced. Shortly after in 1993, newly designed 500 and 1,000 vatu notes were issued. Then the Reserve Bank of Vanuatu issued another series of new notes which were printed on a polymer in 1994. The change was accompanied by the introduction of the 2,000 vatu note. Currently, the residents of Vanuatu deal in denominations of 200, 500, 1,000, 2,000, 5,000, and 10,000 vatu notes.
The polymer 10,000 vatu note was first issued on July 30, 2010 to celebrate Vanuatu’s 30 years of independence.
Currency Exchange Rate
The most popular currency exchange rate is between the Australian dollar (AUD) and the Vanuatu Vatu (VUV). As of June 28, 2017 the exchange rate was 1 AUD for 86.89 VUV. On the other hand, the exchange rate between the vatu and the US dollar on the same day was 1 USD being equivalent to 109.03 VUV. During traditional ceremonies such as payment of bride prices, instead of using the vatu, residents use items of value such as pigs, long dyed mats, and tusks.