Solomon Islands Dollar

Overview

The Dollar is has been the official currency of the Solomon Islands since 1977. In order to differentiate the currency against the Dollars of many other nations, the Solomon Islands Dollar is often labeled SI$. Like many of those other Dollar-denominated currencies, the Solomon Islands Dollar is sub-divided into 100 cents.

Economy

• Solomon Islands is considered a lesser-developed nation, due to its low GDP of ~US$600 per capita. As much as 75% of the labor force is employed in subsistence farming and fisheries.
• Solomon Islands is reliant on imports for most manufactured goods and petroleum products. Its exports include copra, palm oil, and timber.
• The country has a large amount of mineral resources such as gold, lead, nickel and zinc, but mining has remained relatively undeveloped due to instability within the country.
• Tourism is an important industry for the Solomon Islands, though the lack of infrastructure and transportation has prevented large-scale growth.
• The government of the Solomon Islands was declared insolvent by 2002, however in recent years the country has consolidated and renegotiated its domestic debt, and is now seeking forgiveness from its international creditors.
• Primary aid providers include its neighbours, Australia and New Zealand, as well as the European Union, Japan, and China.

History

• Prior to 1977, the nation relied on currencies from other countries, in particular the British Pound and the Australian Dollar.
• When the Solomon Islands gained its independence in 1977, the Australian Dollar was replaced by the Solomon Islands Dollar at par. At the time, the country introduced the first coins and banknotes to be used in trade.
• For the next 4 years, the Solomon Islands Dollar remained equivalent in value to the Australian dollar. However, in 1979 the Dollar was revalued to equal A$1.05. After five months at this new value, the peg was removed and the Solomon Islands Dollar was allowed to float in value.
• For the next few decades, the country’s economy stagnated, leading to a considerable devaluation of the Dollar. As such, other specialty goods, including rare items such as dolphin’s teeth, have been used as a currency by some of the local people.