Irish pound: Wikis

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Irish pound
Punt Éireannach (Irish)
£1 coin (reverse) Irish Elk
£1 coin (reverse) Irish Elk
ISO 4217 Code IEP
User(s) Republic of Ireland Ireland
ERM
Since 13 March 1979
Fixed rate since 31 December 1998
Replaced by €, non cash 1 January 1999
Replaced by €, cash 1 January 2002
= £0.787564
Subunit
1/100 penny (English)
pingin (Irish)
Symbol £
(or IR£ to distinguish from other pounds)
penny (English)
pingin (Irish)
p
Nickname quid
Plural pounds (English)
puint (Irish)
penny (English)
pingin (Irish)
pence (English)
pinginí or phingine (after a number) (Irish)
Coins ½p, 1p, 2p, 5p, 10p, 20p, 50p, £1
Banknotes
Freq. used £5, £10, £20, £50 (£50 note only widely circulated in last two years before introduction of euro)
Rarely used £50, £100
Central bank Central Bank of Ireland (Banc Ceannais na hÉireann)
Website www.centralbank.ie
Printer Currency Centre
Mint Currency Centre
This infobox shows the latest status before this currency was rendered obsolete.

The Irish pound (English) or punt Éireannach (Irish) was the currency of Ireland until 2002. Its ISO 4217 code was IEP, and the usual notation was the prefix £, or IR£ where confusion might have arisen with the pound sterling or other pounds. The Irish pound was superseded by the euro on 1 January 1999,[1] when the Irish pound legally became a subdivision of the euro; actual euro currency did not begin circulation until the beginning of 2002.

Contents

First pound

The earliest Irish coinage was introduced in 997 and was initially equivalent to that of France, with the pound divided into 20 shillings, each of 12 pence. After a period of debasement, equivalence to sterling was reestablished in the 1180s.[2] However, from 1460, issues were made with different metal contents to those of England and the values of the two currencies diverged. During the Civil War, 1689-1691, James II issued an emergency, base-metal coinage known as Gun money.

In 1701, the relationship between the Irish pound and sterling was fixed at 13 Irish pounds = 12 pounds sterling. This led to a situation where Irish copper coins circulated with British silver coins, since 13 pence Irish = 1 British shilling. The only 19th century exceptions were silver tokens denominated in pence Irish[3] issued by the Bank of Ireland between 1804 and 1813. The last Irish copper pennies and halfpennies were minted in 1823. The distinct Irish pound existed until January 1826 when it was replaced by British currency. Irish banks continued to issue paper money denominated in sterling after 1826 but no further distinct coins were issued.

Second pound

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Saorstát pound

A new pound was introduced in 1928, although monetary union with sterling was maintained. This new Irish pound was initially known as the Saorstát pound ("Free State pound") and was pegged to the pound sterling. As with sterling, the £sd system was used, with the Irish names punt (plural: puint), scilling (plural: scillingí) and pingin (plural: pinginí). Distinctive coins and notes were introduced. However, the pound sterling continued to be accepted on a one-for-one basis everywhere.

Irish pound

From 1938, the means of tender was referred to as the Irish pound, after the Constitution of Ireland changed the state's name. The Currency Act, 1927, Adaptation Order, 1938 was the actual mechanism by which change took place.

Decimalisation

Decimalisation of the currency was discussed during the 1960s. When the British government decided to decimalise its currency the Irish government followed suit. The legislative basis for decimalisation in the Republic was the Decimal Currency Act, 1969. The number of pence in the Irish pound was redefined from 240 to 100, with the penny symbol changing from "d" to "p". The pound itself was not revalued by this act and therefore pound banknotes were unaffected, although the 10 shilling note was replaced by the 50p coin. New coins were issued of the same dimensions and materials as the corresponding new British coins. The Decimal Currency Act, 1970 made additional provisions for the changeover not related with the issue of coins.

Decimalisation was overseen by the Irish Decimal Currency Board, created on 12 June 1968. It provided changeover information to the public including a pamphlet called Everyone's Guide to Decimal Currency. The changeover occurred on Decimal Day, 15 February 1971.

Breaking the link with sterling

In the 1970s, the European Monetary System was introduced. Ireland decided to join it in 1978, while the United Kingdom stayed out[4].

The European Exchange Rate Mechanism finally broke the one-for-one link that existed between the Irish pound and the pound sterling; by 30 March 1979 the parity link between the two currencies was broken and an exchange rate was introduced[5].

This period also saw the creation of the Currency Centre at Sandyford in 1978 so that banknotes and coinage could be manufactured within the state. Prior to this banknotes were printed by specialist commercial printers in England, and coins by the Royal Mint.

1979-1999: independence

"During the twenty years of the EMS the Irish pound fluctuated widely against sterling, going below 74 pence (February 1981) and as high as 110 pence (November 1992). Nor was it stable against EMS partner currencies. Realignments in the EMS were fairly frequent, averaging about one a year in the 1980s, and the Irish pound depreciated steadily against the Deutsche Mark (DM), anchor of the system, reaching a cumulative depreciation of 34 percent at its low point in 1993. These depreciations both reflected wider weaknesses in the Irish economy in those years and served to prevent a loss of competitiveness from compounding those weaknesses. Thus, contrary to the fears of many observers, linking the currency with the DM did not impose an unsupportable discipline, largely because the option of depreciation was readily availed of"[6].

Until 1986, all decimal Irish coins were the same shape and size as their UK counterparts. After this, however, all new denominations or redesigned coins were of different sizes to the UK coinage. The new 20p and £1 coins were completely different in size, shape and composition to the previously introduced UK versions. When the UK 5p and 10p coins were reduced in size, the Irish followed suit but with the new Irish 10p smaller than the new UK version and the new Irish 5p slightly bigger than the UK version. The Irish 50p was never reduced in size (like it was in the UK).

Unofficially, the British and Irish 1p and 2p coins remained completely interchangeable up until the introduction of the Euro, partly due to their identical size and shape.

Replacement with the euro

On 31 December 1998, the exchange rate between the Irish pound, the European Currency Unit, and 10 other EMS currencies (all but the pound sterling, the Swedish krona and the Danish krone) became fixed at € 1 = IR£ 0.787564. On the next day, a virtual euro was introduced and the exchange rate was GB£ 1 = € 1.42210,[7] making GB£ 1 ≈ IR£ 1.12. By the same token, GB£ 1 would be worth about IR£ 1.287 on 1 January 2002, the day when the physical euro was introduced.[8]

Although the euro became the currency of the Eurozone countries including Ireland on 1 January 1999, it wasn't until the agreed date of 1 January 2002 that the state began to withdraw Irish pound coins and notes, replacing them with euro specie. All other Eurozone countries withdrew their currencies in a similar fashion, from the agreed date. Irish pound coins and notes ceased to be legal tender on 9 February 2002,[9] although they will be exchangeable indefinitely for euro at the Central Bank.

On 31 December 2001, the total value of Irish banknotes in circulation was €4,343.8 million, and the total value of Irish coins was €387.9 million. The Irish cash changeover was one of the fastest in the Eurozone, with some shops illegally ceasing to accept pounds after the first week or two. With a conversion factor of 0.787564 Irish pounds to the euro,[10] fifty-six per cent of the value of Irish banknotes was withdrawn from circulation within two weeks of the introduction of euro banknotes and coins, and 83.4 per cent by the time they ceased to have legal tender status.

Withdrawal of coinage was slower, having a lower priority, with only 45 per cent of coins withdrawn by 9 February 2002. This figure is somewhat misleading, as at that point, almost all coinage in circulation had indeed been withdrawn – the remainder being kept as souvenirs, in hoards, or missing in households.

All Irish coins and banknotes, from the start of the Irish Free State onwards, both decimal and pre-decimal, may be exchanged for euros at the Central Bank in Dublin.

Hidden inflation

Both decimal day and the euro changeover led many in Irish society to believe that prices had been improperly raised by traders taking advantage of the confusion,[11] exchange rates notwithstanding.

In the case of the euro the government took special measures to prevent any unnecessary price changes, which ultimately proved ineffective.

The period of changeover also took place during an economic boom in the country, and inflation was high. As the cost of living and prices rose, people were eager to blame it on the merchants taking advantage of changeover confusion.

Most merchants, especially the larger chains, continued to show the prices in IEP under the EUR price for up to 5 years after the change over. Therefore people could easily see the price in old currency and check if prices had been improperly inflated.

See also

References

  1. ^ Economic and Monetary Union Act, 1998 (Section 6)
  2. ^ Irish Hammered Coinage (~995 to ~1660)
  3. ^ Bank of Ireland - Ten Pence Token - 1805
  4. ^ Mr. Hegarty in the Dail: "With regard to our entry into the EMS we are glibly assuming that the Irish £ will appreciate against sterling on our entry. On reading a paper this morning I noticed that the opposite is true. In the first market opened by Barclays the Irish £ depreciated". Debates at the Irish Parliament Ireland's on participation in the European Monetary System (13 December 1978) http://www.ena.lu/debates_irish_parliament_ireland_participation_european_monetary_december_1978-020003683.html
  5. ^ "It was only in 1978, when beckoned to join the EMS, a Franco-German project for a new zone of monetary stability in Europe, that the Irish government decided to make the change. At first there was some hope that it would prove possible to hold the Irish pound’s value at one pound sterling while still respecting the fluctuation limits in the EMS, despite the fact that Britain had not joined the new exchange-rate mechanism. But the strength of sterling in the early months of the EMS, buoyed up as it was by North Sea oil revenues and by the tight monetary policy of the Thatcher administration, put paid to that hope. It is arguable that a continuation of the sterling link into the early 1980s would have proved politically unsupportable, considering the loss of competitiveness that it might have entailed at a time of rapidly growing unemployment associated with the fiscal adjustment of those years". “Encyclopedia of Irish History and Culture”, Vol.,1 James Donnelly ed., Macmillan Thomson Gale (2002)
  6. ^ “Encyclopedia of Irish History and Culture”, Vol.,1 James Donnelly ed., Macmillan Thomson Gale (2002)
  7. ^ Oanda Corporation. "Exchange rate from pound sterling to euro on 1 January 1999". http://www.oanda.com/convert/classic?expr2=eur&lang=en&date=01%2F01%2F99&value=1&exch2=gbp. Retrieved 2007-02-20. 
  8. ^ Oanda Corporation. "Exchange rate from pound sterling to euro on 1 January 2002". http://www.oanda.com/convert/classic?expr2=eur&lang=en&date=01%2F01%2F02&value=1&exch2=gbp. Retrieved 2007-02-20. 
  9. ^ Irish Pound Notes and Coins (Cessation of Legal Tender Status) Order, 2001
  10. ^ Of the 15 national currencies originally tied to the euro (also including the currencies of Vatican City, Monaco and San Marino [1]), the Irish pound is the only one whose conversion factor is less than 1, i.e. the unit of the national currency was worth more than one Euro.
  11. ^ Inside Ireland, The Euro by Hugh Oram (retrieved 29 October 2006)

External links

  1. ^ 1999 by law, 2002 de facto.

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