Prior to European contact, trade was conducted by barter or, in some areas, shell money, which was made by grinding into discs, polishing and stringing together special kinds of shells. The best-known shell money is that of the Tolai people in New Britain. Under the New Guinea Currency Coinage and Tokens Ordinance 1922-60, shell money was legal tender in New Britain until 1964. Shell money is still used for bride price and small purchases in some New Britain markets, and for traditional ceremonial purposes in other parts of the country.
During the colonial period, German, British and, later, Australian currency was used. Between 1928 and 1945 attempts to circulate coins specially designed for PNG were largely unsuccessful. Australia introduced decimal currency in 1966. At Independence in 1975, PNG issued its own currency. The main unit is the kina which is divided into one hundred toea. There are toea coins of various denominations, and a one kina coin. Higher denominations of the kina are issued as banknotes. At its introduction in 1975 the kina was issued with a value equivalent to that of the Australian dollar. In 1992 K1 exhanged for around $A 1.50 and $US 1. Exchange rates are set by the central bank, the Bank of Papua New Guinea. Current policy is to maintain a strong and easily convertible kina. The exchange rate is tied to the currencies of PNG’s main trading partners.