What currency is used by Palau?

The currency used by Palau is the United States dollar.

Palau uses the U.S. dollar as its official currency, making American banknotes and coins the normal medium of exchange in shops, services and government transactions. The arrangement reflects Palau’s modern political and economic relationship with the United States.

After World War II, Palau became part of the U.S.-administered Trust Territory of the Pacific Islands. Palau later chose a Compact of Free Association with the United States and became fully sovereign in 1994. The compact provides close links in areas such as defense, funding and public services while leaving Palau an independent republic.

The currency can be confused with the Australian dollar or other Pacific currencies because Palau is an island country in Oceania. Palau does not use a separate national currency for ordinary circulation. Its official languages are Palauan and English, another reminder of the country’s layered Pacific and American history.