Exchange Rate Policies
Prior to 1983, Australia maintained a fixed exchange rate. The first peg was between the Australian and British pounds, initially at par, and later at 0.8 GBP (16 shillings sterling). This reflected its historical ties as well as a view about the stability in value of the British pound. From 1946 to 1971, Australia maintained a peg under the Bretton Woods system, a fixed exchange rate system that pegged the U.S. dollar to gold, but the Australian dollar was effectively pegged to sterling until 1967.
With the breakdown of the Bretton Woods system in 1971, Australia converted the traditional peg to a fluctuating rate against the US dollar. In September 1974, Australia valued the dollar against a basket of currencies called the trade weighted index (TWI) in an effort to reduce the fluctuations associated with its tie to the US dollar. The daily TWI valuation was changed in November 1976 to a periodically adjusted valuation.
On 12 December 1983, the Australian Labor government led by Prime Minister Bob Hawke and Treasurer Paul Keating floated the Australian dollar, with the exchange rate reflecting the balance of payments and other market drivers.
Read more about this topic: Australian Dollar
Famous quotes containing the words exchange, rate and/or policies:
“We never exchange more than three words with a Friend in our lives on that level to which our thoughts and feelings almost habitually rise.”
—Henry David Thoreau (1817–1862)
“Unless a group of workers know their work is under surveillance, that they are being rated as fairly as human beings, with the fallibility that goes with human judgment, can rate them, and that at least an attempt is made to measure their worth to an organization in relative terms, they are likely to sink back on length of service as the sole reason for retention and promotion.”
—Mary Barnett Gilson (1877–?)
“A nation’s domestic and foreign policies and actions should be derived from the same standards of ethics, honesty and morality which are characteristic of the individual citizens of the nation.”
—Jimmy Carter (James Earl Carter, Jr.)