Globalization started in the whole world during the 1980ís. It is a policy which guarantees free trade options to foreign companies investing in any one of the indigenous companies or market. Australia is a liberal democracy and follows a policy of liberalism in economic matters. The Australians strongly believe that political freedom must be well equilibrated by economic freedom and rights. Australia has openly accepted these political and economic freedoms which are very essential for the growth of an individual. As a part of its globalisation policy, Australia follows a market-oriented and strong foreign investment policy which strengthens future growth.
The foreign exchange market in Australia has witnessed a tremendous growth in the past few years. The Australian dollar is the sixth most traded currency according to the recent surveys. The foreign exchange market in Australia is the seventh largest in the whole world. The growth of the foreign exchange market has outgrown the international turnover by over 50%. The AUD/USD combination is most popular in Australian currency market but its total share has decreased by 53% in 2001 to 49% in 2004. This growth is witnessed in all traditional instruments and activity in the market has grown by 43%. The growth of the Australian foreign exchange market has been at par with the global market. The rate of Australian dollar saw a tremendous hike in comparison to the US dollar from late 2002 and was widely used by investors. The Australian rates saw historical heights in the year 2003 and early 2004. As a result of valuation effects, Australian foreign exchange market has seen a steep progress in 2001.
Australia lowered its tariff rates in the year 1986 to allow free trade in the country. As a result of this, the exports have soared and more so in the manufacturing sector. In the past 20 years, the manufacturing sector has seen a huge progress in its shares and investments. Australia is aiming to strengthen up its agricultural sector so that more American and European companies invest in the Australian market. According to the recent surveys of the International Monetary Fund, the total world income would increase by at least $250 if agricultural trade policies were liberalised by the different countries. Australia is working very hard to promote this cause of liberalising the agricultural sector.
Australia has strong foreign trade links with Asia, United States, New Zealand, Western Europe and the Middle East countries. The country also shares strong defence alliance with U.S.A. The World Trade Organization is the biggest platform for Australia to negotiate the foreign trade policies while selling Australian goods and services to foreign countries. Australia is looking forward towards building a significant economic partnership with China. The Australian government is also trying to better its relation with Canada, Latin American and African countries in terms of trading, investment and other global issues.
The Australian Taxation Office generates rules and determinations for the foreign exchange policy in Australia. The new rules were applicable from July 1, 2003. These policies are determined on the amount of loss and profit made in a particular fiscal year. The current foreign exchange rate in Australia is 1 AUD=0. 792USD.