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Untitled Document
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Australia |
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The currency of Australia is the Australian dollar. The foreign exchange regime of Australia has developed from the fixed regime, through the managed floating, to the independently floating.
Australia maintained fixed exchange rates during the Bretton Woods period of 1945-1973. After the breakdown of the Bretton Woods system in 1973, the fixed exchange system moved to a managed floating system, in which the exchange level was set daily by the Reserve Bank and linked to a trade-weighted currency basket.
In the 1980s, many capitalistic countries were in the trend of floating their currencies. The reason might be that they realized the loss of independent control on domestic monetary policy could lead to inflations and reductions in export competitiveness. In addition, the linked exchange rate might expose the country to speculative attacks.
At the end of 1983, virtually all foreign exchange controls in Australia were removed. The link of the Australian Dollar to a trade-weighted basket of currencies has since been abolished, and the unit has been reclassified as independently floating. The exchange rate is market-determined. Authorized foreign exchange dealers may deal among themselves, with their customers, and with overseas counterparts at mutually negotiated rates for both spot and forward transactions in any currency with regard to trade-and non-trade-related transactions. However, the Reserve Bank of Australia (RBA) retains discretionary power to intervene in the foreign exchange market. There is no official exchange rate for the Australian dollar. The RBA publishes an indicative rate for the Australian dollar based on market observation at 4 p.m. daily.
Sources of reference include:
1. World Currency Yearbook. (WCY)
2. IMF Annual Report on Exchange Arrangement and Exchange Restriction. (IMF) |
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Date
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Changes
to the exchange rate regime
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Australian Dollar per U.S. Dollar
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| 14 February 1966 | The Australia Dollar ($A), divided into 100 Cents, was created with an Official Rate of US$1.12, and replaced the Australian Pound worth US$2.24. (WCY 1984, p.75) | 1.120 | | 14 February 1966 | The Australia Dollar ($A), divided into 100 Cents, was created with an Official Rate of US$1.12, and replaced the Australian Pound worth US$2.24. (WCY 1984, p.75) | 1.120 | | 15 August 1971 | Following the floating of the U.S. Dollar, the Australian Dollar was linked to the Pound Sterling effective August 23rd, with Canberra's unit thus appreciating against the American Dollar. (WCY 1984, p.75) | | | 22 December 1971 | Following the de jure devaluation of the U.S. Dollar, it was announced that the gold content of the Australian Dollar would remain unchanged, resulting in a new Official Rate of US$1.216 with a fluctuation range of 2.25% on either side of parity. However, since the exchange rate for the Australian Dollar was now linked to the US Dollar rather than to Pound Sterling as heretofore, an Effective Rate of US$1.191 was established with fluctuation limits of US$1.1886-US$1.1934. (WCY 1984, p.75) | 1.189-1.193 | | 23 June 1972 | After the dissolution of the Sterling Area, Australia's monetary privileges as a member came to an end. (WCY 1984, p.75) | | | 22 December 1972 | The Australian Dollar was upvalued 4.85% in terms of gold. The Official Rate was revised to US$1.275, while the Effective Rate was set equal to the Official Rate with fluctuation limits of US$1.2726-US$1.2774. (WCY 1984, p.75) | 1.273-1.277 | | 13 February 1973 | With the devaluation of the U.S. Dollar, the Australian unit was realigned, based on an unchanged gold content, to US$1.4167 with fluctuation limits of US$1.4143-US$1.4191. (WCY 1984, p.75) | 1.414-1.419 | | 9 September 1973 | Canberra's Dollar was upvalued 5% in terms of gold to an Official Rate of US$1.4875, the fluctuation limits being changed to US$1.485-US$1.490. (WCY 1984, p.75) | 1.485-1.490 | | 25 September 1974 | The Official Rate was devalued 12% in terms of gold to US$1,309. At the same time, an Effective Rate was reestablished, as Canberra's unit was placed on a controlled, floating basis with its exchange rate determined against a "basket" of abount 20 foreign currencies weighted according to their trade significance with Australia. (WCY 1984, p.75) | | | 31 December 1974 | Official Rate: 1.309 | 1.327 | | 31 December 1975 | Official Rate: 1.309 | 1.257 | | 29 November 1976 | The Effective Rate for the Australian Dollar was slashed 17.5%m subsequently followed by periodic revisions. (WCY 1984, p.75) | | | 31 December 1976 | Official Rate: 1.309 | 1.086 | | 31 December 1977 | Official Rate: 1.309 | 1.141 | | 31 December 1978 | Official Rate: 1.309 | 1.151 | | 31 December 1979 | Official Rate: 1.309 | 1.106 | | 31 December 1980 | Official Rate: 1.309 | 1.181 | | 31 December 1981 | Official Rate: 1.309 | 1.128 | | 31 December 1982 | Official Rate: 1.309 | 0.981 | | 12 December 1983 | The link of the controlled, floating Effective Rate for the Australian Dollar to a trade-weighted basket of currencies was broken, and the unit was allowed to float freely. Virtually all foreign exchange controls were removed(WCY 1985, p.73) | | | 30 December 1983 | | 1.074-1.110 | | 28 December 1984 | | 1.208-1.209 | | 31 December 1985 | | 1.468-1.469 | | 31 December 1986 | | 1.504-1.505 | | 31 December 1987 | | 1.384-1.385 | | 31 December 1988 | | 1.168-1.169 | | 31 December 1989 | | 1.261-1.262 | | 31 December 1990 | | 1.293-1.294 | | 1991 | The Reserve Bank of Australia published an indicative rate for the Australian dollar based on market observation at 4 p.m. daily. (IMF 1992, p.25) | | | 31 December 1991 | | 1.316 | | 31 December 1992 | | 1.454 | | 31 December 1993 | | 1.477 | | 31 December 1994 | | 1.287 | | 31 December 1995 | | 1.342 |
Notes: Annotation of the exchange rates listed in the right column of the table.
1971-08-15: Official Rate
1971-12-22: Effective Rate.
1983-12-12: The closing buying and selling rates.
1991-12-31: The indicative rate published by the Reserve Bank of Australia.
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