Irish pound

Irish pound
Punt Éireannach (Irish)
£1 notes (1928–77 and 1976–93)£1 coin (1990–2002)
ISO 4217
Code IEP
Denominations
Subunit
  1⁄100 penny (English)
pingin (Irish)
Plural pounds (English)
puint, punta (Irish)
 penny (English)
pingin (Irish)		 pence (English)
pinginí, pingineacha (Irish)
Symbol £
(or IR£ to distinguish from other pounds)
 penny (English)
pingin (Irish)		 p
Nickname quid
Banknotes
 Freq. used £5, £10, £20
 Rarely used £50, £100
Coins
 Freq. used 1p, 2p, 5p, 10p, 20p, 50p, £1
Demographics
User(s) Currently: None
Previously:  Ireland
Issuance
Central bank Central Bank of Ireland
 Website www.centralbank.ie
Printer Currency Centre of the Central Bank of Ireland
Mint Currency Centre of the Central Bank of Ireland
Valuation
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
This infobox shows the latest status before this currency was rendered obsolete.

The Irish pound (Irish: punt Éireannach) 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 The Irish pound was superseded by the euro on 1 January 1999.[1] Euro currency did not begin circulation until the beginning of 2002.

First pound

The earliest Irish coinage was introduced in the year 997, with a pound divided like the English pound into twenty shillings, each of twelve silver pence. Parity with the pound sterling was established by King John around 1210, so that Irish silver could move freely into the English economy and help to finance his wars in France.[2] However, from 1460, Irish coins were minted with a different silver content to those of England, so that the values of the two currencies diverged.

During the Williamite War of 1689–1691, King James II, no longer reigning in England and Scotland, issued an emergency base-metal coinage known as gun money.

In 1701, the relationship between the Irish pound and the English pound sterling was fixed at thirteen Irish pounds equalling twelve English pounds. (The Scottish pound had yet another value.) This relationship made it possible for Irish copper coins to circulate with English silver coins, since thirteen Irish pence had the same value as one English shilling.

In 1801, Ireland became part of the United Kingdom of Great Britain and Ireland, but the Irish pound continued to exist until January 1826. Between 1804 and 1813 silver tokens worth tenpence were issued by the Bank of Ireland and were denominated in pence Irish.[3] The last copper coins of the Irish pound were minted in 1823, and in 1826 the Irish pound was merged with the pound sterling.[4] After 1826 some Irish banks continued to issue paper bank notes, but these were denominated in pounds sterling, and no more distinctly Irish coins were minted until the creation of the Irish Free State in the 20th century.

Second pound

Saorstát pound

From continuing to use sterling after independence (1922), the new Irish Free State brought in its own currency from 1928.[5] The new Saorstát (Free State) Pound was defined by the 1927 Act to have exactly the same weight and fineness of gold as was the sovereign at the time, having the effect of making the new currency pegged at 1:1 with sterling. De facto rather than de jure, parity with sterling was maintained for another fifty years. 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, the coins from 1928 (in 8 denominations: 1/4d farthing, 1/2d halfpenny, 1d penny, 3d threepence, 6d sixpence, 1s shilling, 2s florin, 2s 6d half crown and in 1966 a 10s coin) – all with the same dimensions as their British counterparts. However, the pound sterling generally continued to be accepted on a one-for-one basis everywhere, whereas the Irish currency was not generally accepted in the United Kingdom.

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. The new 5 pence coin correlated with the old 1 shilling coin, and the new 10 pence coin correlated with the old 2 shilling 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.

In the 1970s, the European Monetary System was introduced. Ireland decided to join it in 1978, while the United Kingdom stayed out.[6]

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 an exchange rate was introduced.[7]

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 British Royal Mint.

1979–1999: Independence

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 coin introduced that year and the £1 coin (introduced in 1990) 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 the new Irish 10p was smaller than the new UK version introduced in 1992 and the new Irish 5p was slightly larger than the UK version introduced in 1990. The Irish 50p was never reduced in size (as it had been in the UK in 1997).

Replacement with the euro


31 December 1998, the exchange rates between the European Currency Unit and the Irish pound and 10 other EMS currencies (all but the pound sterling, the Swedish krona and the Danish krone) were fixed. The fixed conversion factor for the Irish pound was €1 = IR£0.787564. On the next day, a virtual euro was introduced and the exchange rate was GB£1 = €1.42210,[8] making GB£1 ≈ IR£1.12. By 1 January 2002, the day when the physical euro was introduced, GB£1 was worth about IR£1.287.[8] Following the appreciation of the euro since its launch and the fall of Sterling in 2007–2009, as of May 2012, GB£1 was worth about the equivalent of IR£0.98.

Although the euro became the currency of the eurozone countries including Ireland on 1 January 1999, it was not until 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 that date. Irish pound coins and notes ceased to be legal tender on 9 February 2002,[9] although they are intended to 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[9] ceasing to accept pounds after the first week or two. With a conversion factor of 0.787564 Irish pounds to the euro,[10] 56%, by value, of Irish banknotes was withdrawn from circulation within two weeks of the introduction of euro banknotes and coins, and 83.4% by the time they ceased to have legal tender status.

Withdrawal of coinage was slower, having a lower priority, with only 45% of coins withdrawn by 9 February 2002.

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

Hidden inflation

When decimal currency and the euro were in turn introduced, many people in Ireland believed 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 try to prevent any unnecessary price changes, which ultimately proved ineffective. The changeover coincided with an economic boom in the country, and inflation was moderately high. People were eager to blame price rises on merchants taking advantage of changeover confusion.

Most retailers, especially the larger chains, continued to show prices in Irish pounds under the euro price for up to 5 years after the changeover, enabling people to see the price in old currency and check whether prices had been improperly inflated.

See also

References

  1. ↑ Economic and Monetary Union Act, 1998 (Section 6)
  2. ↑ "Irish Hammered Coinage (~995 to ~1660)". Retrieved 11 September 2016.
  3. ↑ "Bank of Ireland - Ten Pence Token - 1805". Retrieved 11 September 2016.
  4. ↑ Pulling, Alexander (1904). "Proclamation, dated December 20, 1825, assimilating the Gold and Silver Coinages in Great Britain and Ireland.". Coin. The statutory rules and orders revised, being the statutory rules and orders (other than those of a local, personal, or temporary character) in force on December 31, 1903. 2 (2nd ed.). London: H.M.S.O. pp. 8–9.
  5. ↑ The relevant enabling Acts were the Coinage Act, 1926 and the Currency Act, 1927.
  6. ↑ Mr. Hegarty in the Dáil: "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)
  7. ↑ "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)
  8. 1 2 Oanda Corporation. "Exchange rate from pound sterling to euro on 1 January 1999". Retrieved 20 February 2007.
  9. 1 2 "S.I. No. 313/2001 - Irish Pound Notes and Coins (Cessation of Legal Tender Status) Order, 2001". Retrieved 11 September 2016.
  10. ↑ Of the 15 national currencies originally tied to the euro (also including the currencies of Vatican City, Monaco and San Marino ), the Irish pound was the only one whose conversion factor was 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)
  1. ^ 1999 by law, 2002 de facto.
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