What is the AWG (Aruban Florin)
The Aruban Florin (AWG) is the national currency of Aruba. It is subdivided into 100 cents and issued by the Aruba central bank, the Centrale Bank van Aruba. The Aruban florin is also known as the Aruban Guilder.
The Aruban florin or Aruban guilder, replaced the currency's predecessor, the Netherlands Antillean guilder at par.
BREAKING DOWN AWG (Aruban Florin)
The Aruban Florin (AWG) dates from 1986, the year Aruba obtained its independence from the Netherlands. The Dutch had occupied the island since supplanting Spanish colonists in 1636. The island became a strategic outpost to protect the salt exported from South America. Britain briefly gained control of Aruba during the Napoleonic wars before the Netherlands regained colonial power in 1816.
Aruba first requested its autonomy from the Netherlands in 1947. In 1954, it became part of the Netherlands Antilles, an autonomous country within the Kingdom of the Netherlands, along with the islands of Sint Maarten, Saba, Sint Eustatius, Bonaire, and Curaçao. Aruba eventually drafted its constitution in 1985 and held its first parliamentary elections in 1986.
The Netherlands Antilles initially used the Dutch guilder in the 1700s, before switching to the Spanish real between 1799 and 1828. The Dutch guilder returned in 1828, at which point one guilder subdivided into 100 cents. During Germany's occupation of the Netherlands’ during World War II, the guilder pegged to the United States dollar at a rate of 1.8858 guilders per 1 U.S. dollar. The Dutch changed the peg to 1.79 guilders per U.S. dollar in 1971.
Beginning in 1947, Aruba petitioned for independence from both the Kingdom of the Netherlands and later, in 1972, from the Netherlands Antilles. The kingdom granted gradual autonomy, and Aruba broke with the Antilles in 1986. Full autonomy, set for 1996, has not happened and is postponed indefinitely.
As part of the gradual move to self-rule, Aruba replaced the Netherlands Antillean guilder with the Aruban florin. The new currency adopted the same pegging to the USD, as used by its predecessor.
The Economy Basis of the Aruban Florin
Aruba has a high standard of living among Caribbean islands and a low rate of unemployment. The Aruban economy depends mainly on tourism, which is dominated by visitors from Venezuela and the United States. Oil processing, the primary industry before political autonomy within the Kingdom of the Netherlands, now plays a smaller role in the economy. Aruba also boasts a healthy offshore banking industry and relatively minor agriculture and manufacturing sectors.
Currently, the Aruban Florin (AWG) pegs its value to the U.S. dollar (USD) at a rate of 1.79 florins to 1 U.S. dollar. The street value of the florin to the USD is slightly lower at 1.75. Due to the currency peg and the prevalence of tourists from the United States, many businesses in tourist areas accept U.S. dollars in addition to Aruban florins. Despite the peg rate of 1.79, many supermarkets and gas stations use a lower exchange rate of 1.75 florins per U.S. dollar. Cash typically exchanges for 1.77 florins per dollar, while traveler’s checks use a rate of 1.78 florins per U.S. dollar.