5308.0 - Foreign Currency Exposure, Australia, March Quarter 2013

ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 31/10/2013

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EXPLANATORY NOTES

INTRODUCTION

1 This publication presents results in respect of 31 March 2013, from an ABS survey of Australian resident enterprises with exposure to foreign currency. This is the fourth occasion this survey has been conducted; the first was conducted in respect of 30 June 2001 as a supplementary survey to the Survey of International Investment, with results published in the December quarter 2001 issue of Balance of Payments and International Investment Position (cat. no. 5302.0). Subsequent surveys were conducted in respect of 31 March 2005 and 31 March 2009, with results published in the 2005 and 2009 issues of Foreign Currency Exposure, Australia (cat. no. 5308.0).

SCOPE

2 The scope of the survey was all Australian resident enterprises with significant foreign currency exposure through foreign currency denominated balance sheet positions and/or expected future foreign currency receipts and payments from trade of goods and services. This included government and private institutions, primarily financial corporations, importers and exporters. Expected future foreign currency receipts and payments from trade are not available for 30 June 2001, but are included in the results for 31 March 2005, 2009, and 2013.

COVERAGE

3 The survey population was designed to include those enterprises that cover in excess of approximately 90 per cent of foreign currency exposure for assets and liabilities, and was supplemented with a sample of importers and exporters with significant foreign currency denominated trade in goods and/or services.

4 Through continuing processes to refine the quality of the survey population, the ABS identified an undercoverage issue in the frame for the 2005 and 2009 surveys. The ABS amended the coverage for the 2013 survey, but was unable to source comparable data to revise historical estimates. As a result, estimates for expected future payments from trade with respect to the 31 March 2013 survey are not comparable with results from previous surveys.

INSTITUTIONAL SECTORS AND SUBSECTORS

5 The sectors used in this publication reference the Standard Economic Sector Classifications of Australia 2008 (SESCA) (cat. no. 1218.0). Classification of individual enterprises to subsectors used four-digit classes specified in the Standard Institutional Sector Classification of Australia (SISCA), grouping units according to similar economic functions and structural characteristics. For this publication, the SISCA classes were classified into sectors as follows:

BANKS
RESERVE BANK OF AUSTRALIA
OTHER FINANCIAL CORPORATIONS
CENTRAL BORROWING AUTHORITIES & GENERAL GOVERNMENT
OTHER RESIDENT SECTORS

6 The basic unit that is classified by sector is the institutional unit, which is defined as an economic entity that is capable, in its own right, of incurring liabilities and engaging in economic activities and transactions with other entities.

STATISTICAL UNIT:

7 The unit for which statistics were reported in the survey was the Australian enterprise unit. This consists of all the entities within an Australian enterprise group that are in the same SESCA subsector.

REFERENCE PERIOD:

8 Data contained in this publication relate to foreign currency denominated financial positions (balance sheet) and expected future foreign currency receipts and payments from trade collected from selected enterprises as at 31 March 2013. Summary data from the previous surveys are also included.

ACCURACY AND RELIABILITY:

9 Care should be exercised in the use and interpretation of data in this publication. While every effort is made to ensure the accuracy and reliability of data it is still possible that the variability within data can be significant.

10 Responses were received from 90% of the surveyed enterprises.

11 Results for 31 March 2013 exclude expected future foreign currency receipts and payments from trade in the 'greater than 10 years' time horizon. These data would distort the analysis because of the greater uncertainty surrounding their capacity to forecast estimates and bias introduced by smaller businesses having greater difficulty reporting this information.

12 For 31 March 2013, the ABS has discontinued an estimation technique employed in previous survey periods. This estimation was designed to enhance comparability of expected future receipts (from export of goods and services) with expected future payments (for import of goods and services) via benchmarking data to historical data for foreign currency receipts and payments sourced from Export and Invoice Currencies (cat. no. 5368.0). The ABS is cautious in applying this technique given currency value volatility and an improved coverage in 2013. For comparability purposes, current invoice currency data is available for the year-to-30 June 2012. Applying the estimation technique to this data results in foreign currency payments increasing by a factor of 1.359.

ROUNDING:

13 Where figures have been rounded, a discrepancy may occur between the sum of the component items and the total. Published percentages are calculated prior to rounding of figures and therefore a discrepancy may occur between the published percentages and percentages which could be calculated using the published estimates.

SIGN CONVENTION:

14 Contrary to the balance of payments conventions, this publication uses the natural sign convention in the presentation of data, analysis and associated commentary.

CURRENCY CONVERSION:

15 Data are expressed in Australian dollars. Amounts denominated in a foreign currency are converted to Australian currency at the market exchange rate at the reference date.

VALUATION BASIS:

16 In these statistics all asset and liability positions are valued at market prices.

17 The principal value is reported for all financial derivative currency contracts. The principal of a derivative contract is the underlying notional amount upon which the transaction is based.

FURTHER INFORMATION

18 Tables 1 to 23 of this publication are available free on the ABS website <https://www.abs.gov.au> from the 'Downloads' tab of this issue. A number of these tables present more detailed breakdowns than included in the publication and a number of additional tables are also available free on the ABS website.

19 Tables with more detailed breakdowns:

7. Foreign currency assets and liabilities - by currency - as at 31 March 2013, by sector
8. Foreign currency denominated debt security liabilities, by maturity - by currency - as at 31 March 2013, by sector
10. Foreign currency denominated assets and liabilities, by level of hedging - by currency - as at 31 March 2013, by sector
11. Hedging of foreign currency denominated debt security liabilities - by currency - as at 31 March 2013, by sector
12. Maturity matched hedging of foreign currency denominated debt security liabilities - by currency - as at 31 March 2013, by sector
16. Value of derivative contracts - by counterparty and currency - as at 31 March 2013, by sector

20 Additional tables:

Determinants of hedging strategy - by sector - by financial instrument.

21 Tables presented in this publication and online have been reordered since the 2009 issue of this publication to accommodate new tables and other changes. As a reference for users, the following table presents a concordance between the tables for the current publication and those published in 2009.

Concordance Guide: 2013 to 2009 Website Tables

	2013 Website Table Number	2009 Website Table Number

	1. Foreign Currency Exposure, at end of period	1
	2. Foreign Currency Exposure – by sector – as at 31 March 2013	2
	3. Foreign Currency Exposure of assets and liabilities – by currency – as at 31 March 2013	3
	4. Foreign Currency Exposure of derivative contracts – by currency – as at 31 March 2013	4
	5. Foreign currency debt assets and liabilities, by maturity – by sector – as at 31 March 2013	5
	6. Foreign currency assets and liabilities, by counterparty – by currency – as at 31 March 2013	16
	7(a–e). Foreign currency assets and liabilities – by currency – as at 31 March 2013	–
	8(a–e). Foreign currency denominated debt security liabilities, by maturity – by currency – as at 31 March 2013	–
	9. Foreign currency denominated expected receipts and payments from trade	6
	10(a–e). Foreign currency denominated assets and liabilities, by level of hedging – by currency – as at 31 March 2013	–
	11(a–e). Hedging of foreign currency denominated debt security liabilities – by currency – as at 31 March 2013	–
	12(a–e). Maturity matched hedging of foreign currency denominated debt security liabilities – by currency – as at 31 March 2013	–
	13. Type of derivative contract, by sector – as at 31 March 2013	7
	14. Type of derivative contract, by currency – as at 31 March 2013	8
	15. Value of derivative contracts, by maturity – by sector – as at 31 March 2013	9
	16(a–e). Value of derivative contracts, by counterparty – by currency – as at 31 March 2013	17
	17. Hedging policy – Foreign equity assets	–
	18. Hedging policy – Foreign currency denominated debt assets (excluding intra-group counterparties)	–
	19. Hedging policy – Foreign currency denominated debt assets (intra-group counterparties)	–
	20. Hedging policy – Expected future receipts from trade	13
	21. Hedging policy – Foreign currency denominated debt liabilities (excluding intra-group counterparties)	–
	22. Hedging policy – Foreign currency denominated debt liabilities (intra-group counterparties)	–
	23. Hedging policy – Expected future payments from trade	15
	24. Determinants of Hedging Strategy – Foreign equity assets	–
	25. Determinants of Hedging Strategy – Foreign currency denominated debt assets (excluding intra-group counterparties)	–
	26. Determinants of Hedging Strategy – Foreign currency denominated debt assets (intra-group counterparties)	–
	27. Determinants of Hedging Strategy – Expected future receipts from trade	21
	28. Determinants of Hedging Strategy – Foreign currency denominated debt liabilities (excluding intra-group counterparties)	–
	29. Determinants of Hedging Strategy – Foreign currency denominated debt liabilities (intra-group counterparties)	–
	30. Determinants of Hedging Strategy – Expected future payments from trade	23