Vabuaty Vatu (VUV): What It is and Example

What Is the Vanuatu Vatu (VUV)?

The Vanuatu Vatu (VUV) is the national currency of the Republic of Vanuatu, located in the Pacific Ocean. It was introduced in 1981, replacing the New Hebrides franc. The Vanuatu vatu has no subunit and is often represented with the symbol Vt.

Key Takeaways

• The Vanuatu Vatu (VUV) is the national currency of Vanuatu.
• Vanuatu is an island nation whose economy depends on the export of basic agricultural commodities.
• In 2015, Vanuatu was devastated by Cyclone Pam, a category 5 tropical cyclone.

Understanding the VUV

The VUV is the abbreviation of the Vanuatu vatu, the currency that replaced the former currency of the New Hebrides franc in 1981. Unlike most other currencies, the vatu is not issued in subdivisions, such as cents. Instead, it has coins issued in units of 1, 2, 5, 10, 20, 50, and 100 vatu. Its banknotes are issued in denominations ranging between 200 vatu and 10,000 vatu.

For ease of conversation, residents of Vanuatu sometimes refer to 100 vatu as one "dollar". Although the vatu has no official exchange rate relative to the dollar, this reference has remained popular among locals because the vatu has historically traded at a ratio of approximately one U.S. dollar (USD) per 100 vatu. Larger transactions are therefore often priced in "dollars", such as referring to a 100,000-vatu purchase as "one-thousand dollars".

Vanuatu’s coins are stamped with the Vanuatu coat of arms, featuring the image of a traditional Melanesian warrior. The coins are minted by the Royal Australian Mint, while the currency is controlled by the Reserve Bank of Vanuatu, Vanuatu’s central bank.

Important

Vanuatu played a significant role during World War II, housing a base for Allied forces. During this period, a significant portion of land was purchased by visiting troops. After the war ended, more than one-third of the land in the country was owned by foreigners.

Real World Example of the VUV

Vanuatu, also known as the Republic of Vanuatu, is an island chain in the Pacific Ocean. The country consists of 14 larger islands with many smaller outcropping islands and is structured as a parliamentary democracy. Although there are over 100 Melanesian languages spoken in the region, Vanuatu’s official languages are Bislama, French, and English.

Vanuatu’s economy relies on exports of basic commodities, such as beef and timber. New Zealand and Australia are among its largest import customers. The country has been developing its tourism industry in recent years, although this progress was partially overturned by Cyclone Pam in 2015, which devastated Vanuatu and the surrounding region.