Nestled in the south of Australia and the south of Indonesia, Timor is an island that is divided between Indonesia in the west and the sovereign states of the Democratic Republic of Timor-Leste in the east. East Timor was an overseas territory of Portugal from 1769 until 1975 with the Banco Nacional Ultramarino (National Overseas Bank) responsible for issuing Portuguese Timorese pataca banknotes. In 1912, the BNU finally opened its branch in Dili after 10 years of just having a representative.
At the time of World War II, the Japanese invaded Timor. Despite the nation’s protest with the help of Portuguese forces and their allies, namely, the United Kingdom, Australia, and Netherlands East Indies, Japan conquered the island and replaced the Timorese pataca with Netherlands Indies gulden as well as with the roepiah until Japan’s surrender on September 5, 1945. The pataca was then reintroduced but was replaced with the Timorese escudo in 1958. Notes issued carried the Portugues Empire coat of arms and a portrait of Portuguese colonial administrator Jose Celestino da Silva. In 1963, banknotes bearing a portrait of Regulo D. Aleixo, who was known as King Dom Aleixo Corte-Real, were issued. Currently, the Democratic Republic of Timor-Leste uses the US dollar as its legal tender.