KEY POINTS:
The New Zealand dollar, known by traders as the kiwi, this week rose above US80c for the first time in quarter of a century.
It broke through the US80c barrier in Tokyo yesterday and hit US80.55c this morning. It has risen 81 per cent since it was floated
in 1985 and 30 per cent in the last year.
Below is a chronology of its progress since it came into existence 40 years ago:
* July 1967 - New Zealand dollar replaces pound at a rate of two dollars to the pound and one NZ dollar to US$1.39.
* 1971 - US devalued its dollar relative to gold, leading New Zealand to peg its dollar at a value of US$1.216 with a 4.5 per cent fluctuation range.
* July 1973 to March 4, 1985 - NZ dollar's value was determined from a trade-weighted basket of currencies.
* 1973 - Kiwi hits an all-time high of just under US$1.50 as New Zealand commodity prices soar and New Zealand experiences record balance of payments surpluses.
* 1974 - Kiwi is devalued to around US$1.35 in the wake of slump in wool, meat and butter prices after Britain enters the European Common Market and the first oil shock sends price of petrol soaring.
* July, 1984 - A run on the NZ dollar following the election of a Labour government which indicated it would devalue by 20 per cent. Currency trading is suspended when outgoing prime minister Sir Robert Muldoon initially refused to devalue. After provoking a constitutional crisis he finally agreed to devalue 20 per cent on July 20.
* March 4, 1985 - The kiwi is floated at US44.44c.
* 1985-1988 - Against expectations the kiwi rises strongly post float as the Reserve Bank restricts supply of money and interest rates are ramped up over 25 per cent. The kiwi continues to rise despite the 1987 sharemarket crash and hits US72c as the Reserve Bank is given operational independence with a mandate to squeeze inflation out of the economy.
* December 14, 1988 - Kiwi plunges US3c in just over an hour in one of its biggest one-day moves on the day prime minister David Lange sacks then finance minister Roger Douglas.
* 1993 - The kiwi falls to US51c as recession hits in wake of finance minister Ruth Richardson's "mother of all budgets".
* Mid-1994 - Kiwi rises to US72c, as economy rebounds, peaking at 6.5 per cent economic growth. Investors pour money into New Zealand to capture high interest rates used to try and dampen demand.
* December 1996 to November 2000 - Kiwi falls 45 per cent in a move precipitated by appointment of NZ First leader Winston Peters to the position of treasurer and a loosening of the inflation target. The Asian financial crisis in July 1997 and the disintegration of National-NZ First government followed by election of Labour in 1999 saw the kiwi drop to a nadir of US38.95c in October 2000.
* September 11, 2001 - a turning point for kiwi. Terrorist attack in the US bursts dot.com bubble, coinciding with a recovery in commodity prices and a domestic spending spree ignited by dairy farmers' spending receipts inflated by the low currency. The US dollar begins a 6 year losing streak.
* 2002-2007 - New Zealand dollar rises 94 per cent as New Zealand experiences one of its longest periods of uninterrupted economic growth in living memory. The Reserve Bank is forced to hike interest rates 13 times in four years to try and quell inflation pressures.
* March, 2004 - Reserve Bank given power to intervene in currency market if kiwi is "exceptionally and unjustifiably" high or low. Government bulks up RB balance sheet and reserves with foreign exchange reserves boosted to $7 billion.
* March 9, 2007 - National Party leader and former currency trader John Key predicts NZ dollar was heading to US80c. Kiwi is at US74c and Finance Minister Michael Cullen admitted even then currency a "real concern".
* June 11, 2007 - Reserve Bank intervenes in the currency market for the first time since float. The RB intervenes at US76.4c and sparks a 1.6 per cent fall that proves short-lived.
* July 23, 2007 - Kiwi breaks through US80c barrier.
* July 24, 2007 - NZ dollar hits US80.55c and post-float high of 76.67 on the trade-weighted index, measuring the New Zealand dollar against currency of its five main trading partners.
- NZPA
