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RBA Glossary definition for floating exchange rate

floating exchange rate – Exchange rates determined by market forces based on the demand for and supply of a currency.

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Capital Flows and Exchange Rate Determination

1 Dec 1989 RDP 8908
Ian Macfarlane and W.J. Tease
Research Discussion Papers contain the results of economic research within the Reserve Bank
https://www.rba.gov.au/publications/rdp/1989/8908.html

Capital Movements

1 Dec 1989 RDP 8908
Ian Macfarlane and W.J. Tease
The Exchange Control Department of the Reserve Bank was abolished. Australia can now be classified, with only minor qualification, as a country with a freely floating exchange rate and perfect capital ... However, in periods when interest rates rose in
https://www.rba.gov.au/publications/rdp/1989/8908/capital-movements.html

References

1 Dec 1989 RDP 8908
Ian Macfarlane and W.J. Tease
COE, D.T. and GOLUB, S.T. (1986), “Exchange Rates and Real Long-Term Interest Rate Differentials: Evidence for Eighteen OECD Countries”, OECD Working Paper, February. ... and LOOPESKO, B.E. (1983), “Floating Exchange Rates after Ten Years”,.
https://www.rba.gov.au/publications/rdp/1989/8908/references.html

Appendix

1 Dec 1989 RDP 8908
Ian Macfarlane and W.J. Tease
rates and the exchange rate. This was not the case in the monthly equations. ... t,k. is a white noise process. One of the stylised facts of the international experience with floating exchange rates is that uncovered interest parity does not hold.
https://www.rba.gov.au/publications/rdp/1989/8908/appendix.html

Implications for Monetary Policy

1 Dec 1989 RDP 8908
Ian Macfarlane and W.J. Tease
this relationship cannot be established econometrically, the above conclusions are reasonably standard for a country with a floating exchange rate. ... In a country with a floating exchange rate and interest sensitive capital movements, there is scope
https://www.rba.gov.au/publications/rdp/1989/8908/implications-for-monetary-policy.html

Monetary Management in the Post-Float Period

1 Dec 1989 RDP 8908
Ian Macfarlane and W.J. Tease
Figure 3. INTEREST RATES & THE EXCHANGE RATE. in the first half of 1985, when the Australian dollar fell sharply, monetary policy was tightened. ... Thus, from late 1987 to early 1989, rises in interest rates tended to be accompanied by rises in the
https://www.rba.gov.au/publications/rdp/1989/8908/monetary-management-in-the-post-float-period.html

Exchange Rate Determinants

1 Dec 1989 RDP 8908
Ian Macfarlane and W.J. Tease
The more interesting link for our purposes is the shorter-run relationship between interest rates and the exchange rate. ... One explanation for this result lies in the two-way relationship between interest rates and the exchange rate.
https://www.rba.gov.au/publications/rdp/1989/8908/exchange-rate-determinants.html