Foreign Exchange
Overview
In 1972 the State Electricity Commission of Victoria became the first public sector authority to borrow in foreign currencies. Since 1979 a number of the State's other major authorities also arranged foreign currency financing, principally to take advantage of off-shore interest rates lower than those which were available domestically. Audit reviewed the foreign exchange management practices employed centrally at the Department of Management and Budget (DMB) and Victorian Public Authorities Finance Agency (VicFin) and within all major public sector authorities which engaged in foreign currency financing. The focus of this report is on off-shore borrowing and does not address issues relating to off-shore investments. Detailed audit comments are reported under each major issue. Within some issues a general commentary is given summarising, in broad terms, the application of the issue to the public sector. To support each overall comment, details regarding the audit findings, and in some cases recommendations, are included for each organisation. Organisations' responses to each audit comment are also included. To assist in the reading of these detailed audit comments, a glossary of terms is provided in Appendix B.
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