Understanding Exchange Rates: Australia's Global Currency Connections

In this episode, we unpack the fundamentals of exchange rates and why they matter for an open, trade-driven economy like Australia. We explore key concepts including bilateral exchange rates, cross rates, and the Trade-Weighted Index (TWI). You'll also learn about the different exchange rate regimes—floating versus pegged—and how these systems influence economic stability and international trade. Whether you're a student, economist, or curious listener, this episode offers a clear and practical guide to the world of exchange rates.

Source: RBA