Interest Rate Swap Transactions

19 February 2002

The Australian Office of Financial Management (AOFM) transacts swaps
to assist in the management of Commonwealth debt portfolio exposures.
The Commonwealth’s debt portfolio benchmark sets the broad framework within
which swap activity is planned and executed. While the Commonwealth’s
debt issuance and redemption activity affects the market risk of the Commonwealth
debt portfolio, swaps are the primary instrument used to manage market
risk.

Consistent with the above approach the AOFM has been an active participant
in the Australian dollar interest rate swap market in recent years.

To date over the course of the 2001-02 financial year the AOFM has transacted
Australian dollar interest rate swaps with a notional principal totalling
$2 billion.

No further Australian dollar interest rate swaps transactions are necessary
to achieve debt portfolio objectives, based on current projections, in
2001-02. It is therefore expected that no further Australian dollar interest
rate swaps will be transacted over the remainder of the current financial
year. Any significant variation to this outcome will be publicised.

Data on Commonwealth swap transactions is available on the AOFM website
at www.aofm.gov.au/swap.

CANBERRA
19 February 2002

Contact:
Mr Michael Allen
(02) 6263 1100

Last updated: 5 March 2014