Definition
Loonie is the popular name for the Canadian one-dollar coin, officially introduced in 1987. The term stems from the distinctive engraving of a common loon on the coin’s reverse side. The obverse side features a portrait of Queen Elizabeth II. The coin is made primarily from a nickel-plated steel and is known for its unique eleven-sided shape.
Examples
- Daily Transactions: In Canada, the loonie is commonly used in everyday transactions for small purchases, such as buying coffee or paying for public transportation.
- Currency Exchange: When exchanging currencies internationally, one might note the exchange rates between the U.S. dollar and the Canadian dollar, often tracked using nicknames like the “loonie.”
- Savings: Canadians frequently use loonies for personal savings, collecting them in piggy banks or jars for future use.
Frequently Asked Questions (FAQs)
What is the composition of the loonie?
The loonie is primarily made from a nickel-plated steel core with an outer coating of a bronze-colored alloy.
Why is the coin called a “loonie”?
The coin is called a “loonie” because of the image of a common loon engraved on the reverse side.
When was the loonie first introduced?
The loonie was first introduced in Canada in 1987.
Can the loonie be used outside of Canada?
While the loonie itself isn’t widely accepted for transactions outside Canada, it can be exchanged for local currencies through currency exchange services and banks.
How does the loonie impact the Canadian economy?
The loonie affects Canada’s economy by influencing tourism, exports, and import prices, making it an essential part of monetary policy and economic planning.
Related Terms
Toonie
A: The “toonie” is the colloquial term for the Canadian two-dollar coin, featuring a polar bear on the reverse and Queen Elizabeth II on the obverse.
Exchange Rate
A: The exchange rate is the value of one currency for the purpose of conversion to another. The rate at which the Canadian dollar (CAD) is traded against other currencies can fluctuate based on market conditions.
Fiat Currency
A: Fiat currency is government-issued currency that is not backed by a physical commodity but rather by the government that issued it. The loonie functions as a fiat currency in Canada.
Numismatics
A: The study or collection of currency, including coins, tokens, paper money, and related objects. Collectors of Canadian currency may have an interest in loonies due to their unique design and history.
Online References
Suggested Books for Further Studies
- “The Canadian Dollar Coin: A Milestone in History” by Robert W. Doaktser
- “Canadian Coin Digest: The Collector’s Guide to Canadian Coins” by George S. Cuhaj
- “Money and Exchange in Canada to 1900” by Davis A. McColl
Fundamentals of Loonie: Currency Basics Quiz
Thank you for exploring the fascinating world of the “Loonie.” We hope this article has enriched your understanding and appreciation of Canadian currency!
