The Financial Management and Accountability Act 1997 (FMA Act) and the Commonwealth Authorities and Companies Act 1997 (CAC Act) were repealed on 30 June 2014 and replaced by the PGPA Act from 1 July 2014. Some provisions of the FMA and CAC Acts, however, will remain in force during the transition period; for example performance reporting requirements for the 2013-14 financial year.
The Australian Government's foreign exchange risk management policy has been in place since 1 July 2002. This policy applies to all entities in the general government sector (GGS). The GGS is comprised of FMA Act agencies and GGS CAC Act bodies. The policy applies to both departmental and administered funding.
Foreign exchange risk is the risk that an entity's financial performance or position will be affected by fluctuations in the exchange rate between the Australian dollar and other currencies.
The overarching principle of the policy is that GGS entities are responsible for the management of their foreign exchange risks. However, the entities must not act to reduce the foreign exchange risk that they would otherwise face in the course of their business arrangements.
To assist GGS entities in managing foreign exchange risk, the Department of Finance (Finance) has published the Australian Government Foreign Exchange Risk Management Guidelines, which provide in-principle guidance to entities, and may also be used as a benchmark to assess entities' foreign exchange risk management practices.
Finance Circular 2006/06
Introduces revised guidance on the Australian Government's foreign exchange risk management policy.
Australian Government Foreign Exchange Risk Management Guidelines
Principles based guidance on foreign exchange risk management practices, consistent with the Australian Government's risk management policy.