VUV - Vanuatu Vatu

Vanuatu Vatu history

The Vatu was officially issued on January 1, 1981, a year after Vanuatu gained independence from the joint administration of France and the United Kingdom. Prior to that, the New Hebrides franc was the currency used in the region. 

After Vanuatu separated from colonial rule, it created its own currency to assert its independence and build a unique financial identity. With the ISO currency code VUV, the Vatu quickly became a symbol of the country's financial independence.

The name "Vatu" comes from the local word for "stone," reflecting the country’s strong cultural ties to the use of traditional forms of currency, such as large stone disks called "Rai stones" that were historically used in the archipelago.

Vanuatu Vatu overview

One unique feature of the Vatu is that it does not have a subunit like the cent or penny used in other countries. This is a characteristic shared by some currencies around the world, such as the Japanese Yen or the Tajikistani Ruble.

Currently, Vatu coins are available in denominations of 1, 2, 5, 10, 20, 50, and 100 Vatu. These coins are minted and managed by the Reserve Bank of Vanuatu, the country's central bank. The 1 and 2 Vatu coins are less commonly used due to inflation, and most cash transactions today are rounded to the nearest 5 Vatu.

On the other hand, banknotes come in six denominations: 200, 500, 1,000, 2,000, 5,000, and 10,000 Vatu. The 100 Vatu banknote was once in circulation but was replaced by the 100 Vatu coin in 1988.

 

Other Names for the Vatu in Transactions

Although Vanuatu does not have an official "dollar," people there often refer to 100 vatu as "one dollar" for easier calculations and exchanges. This term became familiar in daily life because at one point, the exchange rate between the vatu and the US dollar was about 100 vatu for one US dollar. For example, an item worth 100,000 vatu is often called "1,000 dollars."

Additionally, due to Vanuatu's history as a British colony, some local languages refer to 10 vatu as "one shilling" and 200 vatu as "one pound." This reflects the historical exchange rate between the vatu and the British pound.

Vanuatu Vatu coins and banknotes

The first coin after Vanuatu's colonial period was the 50 vatu coin, released in 1981 to commemorate one year of independence, minted in nickel. In 1983, Vanuatu issued additional coins of 1, 2, and 5 vatu in copper-aluminum, along with 10, 20, and 50 vatu coins in nickel, replacing the New Hebrides franc and Australian currency on British-controlled islands. Each coin featured Vanuatu's coat of arms, with an image of a native warrior and traditional items. In 1988, the 100 vatu coin was introduced, replacing the 100 vatu banknote.

As for banknotes, in 1982, the Reserve Bank of Vanuatu issued 100, 500, and 1,000 vatu notes, replacing the New Hebrides currency. The 100 vatu note was replaced by a coin in 1988, and the 5,000 vatu note was introduced in 1989.

The Role of the Vatu in the Life and Economy of Vanuatu

The economy of Vanuatu primarily relies on the export of agricultural products and basic resources. Key products include beef, timber, and agricultural goods, which are exported in large quantities to neighboring countries such as New Zealand and Australia.

Tourism is also a significant economic sector in Vanuatu, although it was heavily impacted by Cyclone Pam, a Category 5 tropical storm in 2015. The storm caused significant damage and reduced the number of tourists visiting the country for several years.

The Vatu plays an important role in driving and sustaining Vanuatu's economy, especially in the exchange of goods and services. Furthermore, due to the characteristics of a developing economy, the Vatu is not widely used in international markets and does not have a fixed exchange rate against the US dollar. This requires locals to be flexible in exchanging and using their currency.

In Vanuatu, many communities still use traditional items such as curved pig tusks and dyed mats in wedding ceremonies or for paying fines, instead of the Vatu. The Tangbunia Bank on Pentecost Island even accepts deposits in the form of "livatu," which is equivalent to the value of a curved pig tusk—a symbol important in local culture.

In conclusion, the Vatu is not only a financial medium but also a symbol of culture and history, connecting the people of Vanuatu with long-standing traditions and sustainable community values. The Vatu has become a source of pride, affirming national identity in the modern economy while preserving the unique cultural heritage of this island nation.