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As shown in table 30.2, the balance on current account for 2001-02 was a deficit of $22.2b, an increase of $4.0b (22%) on the previous year. The deficit on goods and services was $2.0b, a turnaround of $2.9b on the 2000-01 surplus of $0.9b. The main contributing factor was the decrease in services credits of $2.2b, down from $33.2b in 2000-01 to $31.0b in 2001-02, returning to historic levels following the effects of the Sydney Olympic Games during 2000-01. The net goods deficit rose $0.7b and the net income deficit rose $1.1b on the previous year.
The surplus on capital account decreased by $0.1b (6%) to $1.0b in 2001-02.
The balance on financial account recorded a net inflow of $20.3b, up $6.0b (42%) on the previous year. Direct investment recorded a net outflow of $0.9b, a turnaround from the net inflow of $4.4b in 2000-01. A rise in the net outflow on Australian direct investment abroad of $13.3b was partly offset by the rise of $8.0b in the inflow of direct investment into Australia. The net inflow on portfolio investment fell $2.8b and reserve assets fell $9.7b. Partly offsetting these movements was a rise of $3.5b in the net inflow on other investment.
30.2 BALANCE OF PAYMENTS, Summary
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 | | | | 1996-97 | 1997-98 | 1998-99 | 1999-2000 | 2000-01 | 2001-02 |
| | | | $m | $m | $m | $m | $m | $m |
|
| Current account | -17,602 | -22,807 | -33,607 | -32,283 | -18,170 | -22,212 |
| Goods and services | 1,570 | -4,738 | -14,428 | -14,351 | 875 | -1,975 |
| | Credits | 105,160 | 113,744 | 112,025 | 125,972 | 153,511 | 152,219 |
| | Debits | -103,590 | -118,482 | -126,453 | -140,323 | -152,636 | -154,194 |
| | Goods | 1,496 | -3,546 | -12,644 | -12,955 | -30 | -757 |
| | | Credits | 80,934 | 88,538 | 85,783 | 97,655 | 120,307 | 121,180 |
| | | Debits | -79,438 | -92,084 | -98,427 | -110,610 | -120,337 | -121,937 |
| | Services | 74 | -1,192 | -1,784 | -1,396 | 905 | -1,218 |
| | | Credits | 24,226 | 25,206 | 26,242 | 28,317 | 33,204 | 31,039 |
| | | Debits | -24,152 | -26,398 | -28,026 | -29,713 | -32,299 | -32,257 |
| Income | -19,151 | -18,091 | -18,430 | -18,150 | -19,077 | -20,220 |
| | Credits | 8,563 | 10,384 | 10,288 | 13,773 | 16,179 | 14,913 |
| | Debits | -27,714 | -28,475 | -28,718 | -31,923 | -35,256 | -35,133 |
| Current transfers | -21 | 22 | -749 | 218 | 32 | -17 |
| | Credits | 3,540 | 3,993 | 4,498 | 4,625 | 4,453 | 4,280 |
| | Debits | -3,561 | -3,971 | -5,247 | -4,407 | -4,421 | -4,297 |
| Capital and financial account | 18,870 | 25,769 | 31,281 | 31,973 | 15,444 | 21,324 |
| Capital account | 1,317 | 1,127 | 1,167 | 1,053 | 1,109 | 1,038 |
| | Capital transfers | 1,323 | 1,097 | 1,186 | 1,136 | 1,182 | 1,120 |
| | | Credits | 2,200 | 2,068 | 2,197 | 2,335 | 2,442 | 2,513 |
| | | Debits | -877 | -971 | -1,011 | -1,199 | -1,260 | -1,393 |
| | Net acquisition/disposal of non-produced, non-financial assets | -6 | 30 | -19 | -83 | -73 | -82 |
| Financial account | 17,553 | 24,642 | 30,114 | 30,920 | 14,335 | 20,286 |
| | Direct investment | 4,895 | 2,852 | 4,747 | 9,641 | 4,368 | -917 |
| | | Abroad | -6,437 | -7,435 | -3,253 | -2,927 | -7,088 | -20,346 |
| | | In Australia | 11,332 | 10,287 | 8,000 | 12,568 | 11,456 | 19,429 |
| | Portfolio investment | 15,192 | 21,164 | 6,455 | 9,330 | 15,710 | 12,921 |
| | Financial derivatives | 2,089 | -2,828 | 2,748 | 431 | -484 | 403 |
| | Other investment | 580 | 2,996 | 16,558 | 14,140 | 3,621 | 7,102 |
| | Reserve assets | -5,203 | 458 | -394 | -2,622 | -8,880 | 777 |
| Net errors and omissions | -1,268 | -2,962 | 2,326 | 310 | 2,726 | 888 |
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| Source: Balance of Payments and International Investment Position, Australia (5302.0). |
Graph 30.3 illustrates the differing influences of the trade balance and the net income deficit on the balance on current account. The net income deficit rose from $7b in 1985-86 to $18-$20b each year from 1994-95 onwards. The underlying level of net income will continue to drive the level and direction of the current account deficit, as Australia continues to service its external liabilities. However, the trade deficit has fluctuated quite significantly over the past 16 years. While the deficit has averaged about $4b per year, it has moved from surpluses of $2b to deficits of $15b.
Table 30.4 shows the annual levels of Australia's official reserve assets and both the end of year and period average exchange rates for the major currencies, special drawing rights, and the trade weighted index.
30.4 RESERVE ASSETS AND EXCHANGE RATES
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| | 1996-97 | 1997-98 | 1998-99 | 1999-2000 | 2000-01 | 2001-02 |
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RESERVE ASSETS(a) ($m) |
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| Total reserve assets | -22,791 | -24,260 | -23,954 | -27,948 | -37,951 | -37,435 |
| Monetary gold | -1,757 | -1,236 | -1,013 | -1,233 | -1,367 | -1,445 |
| Special drawing rights | -37 | -25 | -88 | -141 | -197 | -216 |
| Reserve position in IMF | -627 | -1,449 | -2,338 | -2,225 | -2,412 | -2,992 |
| Foreign exchange | -20,370 | -21,550 | -20,515 | -24,349 | -33,975 | -32,782 |
| Currency and deposits | -4,572 | -11,675 | -7,971 | -9,148 | -11,340 | -11,761 |
| Securities | -15,798 | -9,875 | -12,544 | -15,143 | -22,562 | -21,137 |
| Financial derivatives (net) | n.a. | n.a. | n.a. | -58 | -73 | 116 |
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EXCHANGE RATES |
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| End of period | | | | | | |
| United States dollar | 0.7455 | 0.6135 | 0.6596 | 0.5986 | 0.5075 | 0.5248 |
| United Kingdom pound | 0.4482 | 0.3681 | 0.4188 | 0.3941 | 0.3603 | 0.3537 |
| Euro | . . | . . | 0.6379 | 0.6282 | 0.6002 | 0.5737 |
| Japanese yen | 85.20 | 86.16 | 79.66 | 63.19 | 62.94 | 65.94 |
| Special drawing right | 0.5347 | 0.4617 | 0.4932 | 0.4481 | 0.4076 | 0.4105 |
| Period average(b) | | | | | | |
| United States dollar | 0.7828 | 0.6808 | 0.6276 | 0.6289 | 0.5379 | 0.5239 |
| United Kingdom pound | 0.4851 | 0.4138 | 0.3824 | 0.3948 | 0.3704 | 0.3632 |
| Euro | . . | . . | . . | 0.6278 | 0.6023 | 0.5850 |
| Japanese yen | 90.51 | 86.02 | 77.81 | 67.90 | 61.49 | 66.10 |
| Special drawing right | 0.5521 | 0.5026 | 0.4589 | 0.4642 | 0.4177 | 0.4135 |
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TRADE-WEIGHTED INDEX OF VALUE OF THE AUSTRALIAN DOLLAR(c) |
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| End of period | 56.7 | 57.9 | 58.4 | 53.3 | 49.7 | 50.4 |
| Period average(b) | 58.7 | 58.3 | 56.0 | 55.2 | 50.3 | 50.8 |
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(a) As at 30 June.
(b) These period average exchange rates and index numbers are derived by averaging figures for each trading day.
(c) May 1970 = 100.0. The trade weighted index is reweighted annually and on special occasions as required. |
Source: Reserve Bank of Australia for reserve assets, daily exchange rates and the trade-weighted index. |
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