Impact of Floating Exchange Rates on Company Risk Management Practices: The Australian Experience

This study addressed two research questions: first, the effect of floating the Australian dollar on individual company's exchange risk exposure and, secondly, the extent of company response in managing foreign exchange risk. The findings indicated that floating of the dollar resulted in increased risk exposures though the impacts were not uniform across all companies. Likewise, the impact on foreign exchange risk management practices was not necessarily to the same extent for all companies. Overall, there is evidence that since floating the dollar an increasing number of companies is giving more serious attention to the exchange risk management function.