The RBA's Index of Commodity Prices rose 15.5 per cent over the year in international terms but only 6.6 per cent in Australian dollars, and the gap between those two numbers says a lot about the currency.

Australia's commodity prices are up strongly over the past year. How strongly depends on which currency you measure them in.

The Reserve Bank of Australia's (RBA) Index of Commodity Prices for September 2026, released on 1 October, showed prices up 15.5 per cent over the year when measured in Special Drawing Rights (SDRs), the International Monetary Fund's composite reserve unit. Measured in Australian dollars, the same index rose just 6.6 per cent.

That difference of almost nine percentage points is not a statistical quirk. Because the same basket of prices is being measured in two different units, the gap implies that the Australian dollar has been firmer against the SDR over the year. Put simply, each unit of foreign-currency commodity revenue converts into fewer Australian dollars than it did a year earlier.

The numbers side by side

The September release reported:

  • SDR terms: up 1.4 per cent in September (a preliminary figure), up 0.3 per cent in August and up 15.5 per cent over the year.
  • Australian dollar terms: up 1.0 per cent in September and up 6.6 per cent over the year.
  • Bulk commodities (spot prices, SDR terms): up 3.3 per cent in September and 17.7 per cent higher over the year.

The rural, non-rural and base metals subindices all rose in September. Iron ore, alumina and copper ore were exceptions to the broad pattern of year-on-year price increases.

What the gap implies: a simple illustration

The RBA's release does not itself calculate an exchange rate effect. But the two headline growth rates allow a rough back-of-the-envelope check.

Illustration (simple arithmetic, not an RBA figure): if an index rises 15.5 per cent in one unit of measurement and 6.6 per cent in another, dividing 1.155 by 1.066 gives about 1.083. That suggests the Australian dollar rose roughly 8 per cent against the SDR basket over the year. The same calculation on the September monthly figures (1.4 per cent versus 1.0 per cent) points to a much smaller move of around 0.4 per cent in that single month. These are approximations derived from rounded published figures and should not be read as precise currency measures.

The direction of that result lines up with what RBA officials have said separately about the currency. In his speech in Sydney on 13 August 2026, Assistant Governor (Financial Markets) Christopher Kent noted that the trade-weighted value of the Australian dollar had risen about 5 per cent since the start of 2026. The trade-weighted index and the SDR are different baskets of currencies, so the two figures are not directly comparable, but both point to a stronger Australian dollar.

At 4.00 pm on 9 October 2026, the RBA recorded the Australian dollar at US$0.6979, with the trade-weighted index at 64.8.

Why a firmer dollar matters to the RBA

For commodity exporters, a higher Australian dollar trims the local-currency value of rising world prices. For the RBA, the currency's strength cuts the other way too: it is one of the main ways tighter monetary policy feeds through to inflation.

Kent put it plainly in August: "A higher exchange rate helps moderate inflation by lowering the domestic price of imports."

Governor Michele Bullock went further at her media conference on 29 September 2026, the day the Monetary Policy Board lifted the cash rate target by 25 basis points to 4.60 per cent. Describing how rate rises work, she said: "according to our research, in fact, the most important channel is the exchange rate channel." She added: "raising interest rates impacts import prices. It makes imports cheaper".

Put those observations together and the commodity index tells a two-sided story:

  1. World prices for Australia's commodity exports have risen strongly in international terms.
  2. A firmer Australian dollar has absorbed a large part of that rise once it is converted into local currency.
  3. That same currency strength is, in the RBA's view, an important channel through which higher rates help bring inflation down.

What the index doesn't tell us

The commodity index measures prices, not volumes, so it does not show how much Australia is actually exporting. Nor does the release on its own say how much of the currency's rise reflects interest rate settings rather than other influences. The RBA material reviewed here does not provide that breakdown, and this article does not attempt one.

It is also worth keeping the inflation context distinct. Headline inflation, as measured by the monthly Consumer Price Index, was 4.0 per cent over the year to the August month of 2026. Underlying inflation was lower, at about 3.5 per cent over the past six months according to Bullock, with the trimmed mean at 3.6 per cent in the June quarter. Both remain above the 2–3 per cent target. The Board's statement noted that higher fuel prices were partly passing through to other goods and services, and that further disruption to global oil supply from the Middle East conflict was among the upside risks that had materialised.

In that environment, the import-price relief from a firmer dollar is one offset among several pressures, not a complete answer.

The bottom line

The headline contrast between 15.5 per cent and 6.6 per cent shows how much a stronger Australian dollar has trimmed the local-currency value of rising commodity prices over the past year. A simple calculation using the RBA's published figures suggests the currency rose roughly 8 per cent against the SDR over that period, though that is an approximation rather than an official number.

For the RBA, the same currency strength is part of how tighter policy works. Bullock has described the exchange rate as the most important channel, and Kent has said a higher dollar lowers the domestic price of imports. The next cash rate decision is due at 2.30 pm on 3 November 2026; Bullock has said she will not give forward guidance.