Editing Australian pound (section)

===Gold standard===
[[File:Depression "bread wars", corner store on Riley and Fitzroy Streets, Surry Hills, Sydney, 21 August 1934 - Sam Hood (3705360895).jpg|thumb|left|A corner grocery store in Sydney in 1934 with prices in {{nowrap|shillings (/-)}} and {{nowrap|pence (d)}}.]]
The Australian currency was fixed in value to [[Pound sterling|sterling]]. As such Australia was on the [[gold standard]] so long as Britain was.

In 1914, the British government removed sterling from the gold standard. When it was returned to the gold standard in 1925, the sudden increase in its value (imposed by the nominal gold price) unleashed crushing [[deflation]]ary pressures. Both the initial 1914 [[inflation]] and the subsequent 1926 deflation had far-reaching economic effects throughout the [[British Empire]], Australia and the world. In 1929, as an emergency measure during the [[Great Depression]], Australia left the gold standard, resulting in a devaluation relative to sterling. A variety of pegs to sterling applied until December 1931, when the government devalued the local unit by 20%, making one Australian pound equal to 16 shillings sterling and one pound sterling equal to 25 Australian shillings.

Coins of the Australian pound also circulated freely in New Zealand, although they were never legal tender. By 1931, Australian coins made up approximately 30% of the total circulation in New Zealand. The devaluation of Australian and New Zealand exchange rates relative to the [[pound sterling]] led to New Zealand's ''[[Coinage Act 1933]]'' and the issuing of the first coinage of the [[New Zealand pound]].<ref name=":0">{{Cite journal |last=Stocker |first=Mark |date=2005 |title='A Very Satisfactory Series': The 1933 New Zealand Coinage Designs |url=https://www.britnumsoc.org/images/PDFs/2005_BNJ_75_9_nz.pdf |journal=[[British Numismatic Journal]] |volume=75 |pages=142–160}}</ref>