Australian foreign currency exposure reaches $2.25 trillion
Key points
- Australian enterprises recorded a net asset foreign currency exposure of $2.25 trillion.
- Financial institutions used derivative contracts to hedge $1.03 trillion of debt liabilities.
- The US dollar represented $1.09 trillion of total net foreign currency balance sheet exposure.
Australian resident enterprises recorded a net asset foreign currency exposure of $2.25 trillion as of March 31, marking a 34.6% increase from March 2022, according to data from the Australian Bureau of Statistics.
The figures reflect an upward shift from four years prior, when net foreign currency exposure stood at a revised $1.67 trillion.
The Australian Bureau of Statistics reported that total foreign currency derivative contracts bought in exchange for Australian dollars reached $3.52 trillion.
The data showed that $1.03 trillion of the total $1.76 trillion in foreign currency debt liabilities was hedged through derivative contracts.
Prior to derivative hedging, Australia's net foreign currency balance sheet exposure stood at $2.67 trillion.
Banks were the most active sector in foreign currency derivatives trading, accounting for 78.3% of contracts bought in exchange for Australian dollars.
The banking sector also accounted for 70% of all derivative contracts sold in exchange for Australian dollars during the period.