Australia’s transition from crawling peg to floating exchange rate
Keywords:Australia, foreign exchange market, floating exchange rates, crawling peg
The Australian government began to deregulate its foreign exchange market and move to floating exchange rates in late 1983. Prior to that date there had been a wide range of controls over the foreign exchange market, which became increasingly difficult to sustain in the light of domestic and international developments. After an analysis of the previous form of 'crawling peg' control, a review is made of the financial innovations and changes in the economic environment which forced a move to floating rates. Finally, the experience of floating rates since 1983 is examined.