Australia is the world’s biggest island but despite its size, the economy isn’t that large – in fact it ranked just 14th in the world by gross domestic product in 2019.2
The Reserve Bank of Australia (RBA) is the country’s central bank, which oversees issuing currency and controlling interest rates. Typically, the RBA has always been an extremely conservative institution; it doesn’t make many interventions in the currency market and has some of the highest interest rates in the world.
The Australian economy is heavily reliant on natural resources, energy and food. The diversity and abundance of commodities in Australia means it has attracted a high level of foreign investment over the years. There are a huge number of reserves for coal, iron, copper, gold, natural gas and renewable energy sources that bring in companies from all over the world – over 8% of the country’s GDP comes from mining. As an export-reliant country, increases in export prices that exceed the cost in import prices will boost the Australian economy.