Tonga’s currency is the Tongan paʻanga, it has circulated since it was introduced in 1967. Tonga’s currency history is shaped by colonialism and a resurgence of traditional culture while the economy is highly dependent on remittances.
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- Paʻanga Symbol: T$
- Paʻanga Currency Code: TOP
- Subunits: seniti
- Superunit: hau (100 paʻanga make up one hau, but is only used in commemorative coins)
- Coins: 1¢, 2¢, 5¢, 10¢, 20¢, 50¢, T$1
- Notes: T$1, T$2, T$5, T$10, T$20, T$50, T$100
- GDP: US$865 million
- Central Bank: National Reserve Bank of Tonga
- Inflation: 4.5% (2012 estimated)
Etymology and History
The word paʻanga refers to the native name for the entada plant, which produces large bean pods filled with red-brown seeds that grow as large as 5 cm in diameter. The pods are used to make traditional ankle bracelets.
The name comes from an incident which took place in 1806 when Chief Ha’apai Finau Ulukalala attempted to hijack a passing ship. To avoid capture the crew sank the ship but not before the Tongans boarded and began to plunder the ship. The chief came across a large chest containing valuable coins, but unaware of their purpose and noticing their resemblance to paʻanga seeds he called the currency paʻanga.
Unfortunately Chief Ulukalala was unaware of the value of the coins and left them on the ship which he ordered his men to burn as it sank. It was not until many years later that he learned what he had missed.
When Tonga fell under British rule the pound circulated, the currency was then supplemented in 1921 by locally issued notes from the Tongan government. Unusually this first set of Tongan issued notes contained a 4 shilling denomination. These were the first Tongan pounds.
As the Australian pound tumbled against the GBP due to the great depression there was much confusion in the South Pacific about whether accounts should be counted in Australian or British pounds. The Tongan pound was eventually devalued in 1936 and replaced altogether nearly thirty years later.
The Tongan paʻanga was introduced in 1967 at a rate of 1 pound to 2 paʻanga. The name paʻanga was chosen because the name ‘dollar’ too closely resembled the native word ‘tola’ which translates to a pig’s snout, the soft part of a coconut, or a vulgar name for a mouth.
Originally the Tongan paʻanga was pegged to the Australian dollar at a rate of 1 to 1. However since 1991 it has been pegged to a basket of currencies including the Australian dollar, New Zealand dollar, US dollar, and Japanese yen. On July 29, 2011 the currency was worth 1 USD = 1.6174 TOP but has fallen over the last six years to 1 USD = 2.2363 TOP at the time of writing.
The paʻanga is not convertible which means it can’t be traded on the forex market.
New banknotes were released in 2015 and feature a portrait of the King Tupou VI.
The latest series of coins were printed by the Royal Australian Mint and feature the king in military uniform. They are notable for featuring the monarch in a portrait style (i.e. from the front) rather than in profile (i.e. from the side).
|2 seniti||1981||Taro||Six people holding hands and “PLANNED FAMILIES FOOD FOR ALL”||Bronze|
|5 seniti||2015||King Tupou VI||Heilala||Nickel-plated steel|
|5 seniti||1981||Chicken and chicks||Coconuts||Bronze|
|10 seniti||2015||King Tupou VI||Malau||Nickel-plated steel|
|10 seniti||1981||King||Bananas on a tree||Cupronickel|
|20 seniti||2015||King Tupou VI||Kalia||Nickel-plated steel|
|50 seniti||2015||King Tupou VI||Milolua||Nickel-plated steel|
|1 pa’anga||2015||King Tupou VI||Tongan coat of arms||Aluminium bronze|
Fully half of the country’s population lives outside of Tonga, primarily in Australia, New Zealand, and the US, and the economy is heavily dependent on them for remittances. GDP growth clocks in at about 1.4%, well below the 4.5% estimated inflation, and while unemployment is just 8%, 16% of people live below the poverty line. Fishing, construction and tourism are the main industries. This is despite the fact that tourism is still underdeveloped relative to other countries in the region.
Tonga plans on growing the private sector, reinvigorating the squash, banana and vanilla bean industries, improving telecoms and transport, and expanding the tourism industry.
The bottom line
The Tongan paʻanga is tied to the value of a batch of currencies, so its day to day value is not directly affected by the country’s economy. Still, it can be revalued based on economic factors. Currently it exchanges poorly against the USD, EUR, GBP, AUD, JPY, NZD, and CAD, making the area somewhat cheaper as a tourist destination.
Tourism and renewed agriculture and fishing seem to be the way forward for Tonga, and the Tongan paʻanga.
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