The Solomon Islands dollar

Who issues it and under which law

Parliament passed the Solomon Islands Monetary Authority Ordinance in June 1976. Until then the Treasury Department at the Ministry of Finance had handled the country's currency together with the Commonwealth Trading Bank of Australia. For its first year the new authority spent most of its effort on one task, a currency the islands could call their own.

An Act of Parliament made the authority a central bank in 1983. Monetary policy and the setting of interest rates became its work, along with regulation. Sections 18 to 25 of the CBSI Act 2012 now make the bank the only institution that can issue banknotes and coins, and make what it issues legal tender.

What the new dollar replaced

The islands had used the Australian pound. They had issued notes of their own as well, sometimes called the Solomon Islands pound. During the Second World War, under Japanese control, the Oceanian pound issued by Japan became the official money until the pound was restored. The Australian dollar replaced the pound in 1966 and circulated in the islands until 1976.

The Solomon Islands dollar came in at par with the Australian one, from an authority whose first office was inside the Police Headquarters at Rove, with the vault and the currency operation on the ground floor and the administration upstairs. For several years afterwards the authority was busy converting Australian notes and coins into the new money and shipping the Australian currency back to Australia.

The two dollars stayed equal until 1979. The Solomon Islands dollar was then pegged for five months at SI$1 to A$1.05 before it was floated.

How the coins shrank

The 1977 coins ran from 1 cent to 1 dollar. The cents matched Australian coins in size and weight and in their metal, and the dollar was a seven-sided cupro-nickel piece; each reverse showed something important to the islands' own culture, the 10 cents a sea god, Ngoreru, from the Temoto region. A twelve-sided 50 cents followed in 1988 to mark ten years of independence. With inflation high, the 1 and 2 cents dropped out of use and prices were rounded to the nearest 5 cents.

In 2008 many islanders hoarded coins or gave them to children as keepsakes, and a shortage followed. A public campaign urged people to take their spare coins to the bank.

A second, smaller series came in 2012, struck like the first by the Royal Australian Mint, because most of the old coins cost more to make than they were worth. It has 10, 20 and 50 cents in nickel-plated steel and brass $1 and $2 coins, the $2 replacing the note. The 1, 2 and 5 cents were dropped. The new $1 and $2 come close to Australia's in thickness and colour. Their edges carry the same interrupted reeding.

Which notes are in circulation

The first notes, of $2, $5 and $10, were issued on 24 October 1977, with the $20 added in 1980, the $50 in 1986 and the $100 in 2006. Each note has its own theme from daily life in the islands. The central bank began redesigning its notes with the $50 in 2013, printed by De La Rue, then the $100 in 2015 and the $20 and $10 in 2017. A polymer $5 came out in the first quarter of 2019, part of the bank's plan to bring polymer back into circulating notes. For the fortieth anniversary of independence it issued a commemorative $40 note and a coloured $2 coin.