Exchange Rates

An exchange rate is the value of one currency in terms of another currency. The exchange rate can have an important influence on economic activity, inflation and the balance of payments in a small open economy such as Australia.

Exchange rates are measured in different ways and, over the years, there have been different operational arrangements for determining the value of Australia’s exchange rate. Currently, Australia has a floating exchange rate, and it is the fifth most traded currency in foreign exchange markets.

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