This article analyses the exchange rate shocks and its pass-through to various level of prices in
two emerging economies and one developed country by employing a structural VAR
framework over the period 1990-2011. We assess the pass-through into import, export,
producer and consumer prices in Australia, China and India in industries including mining,
agriculture and manufacturing. We test whether the exchange rate pass-through to import prices
is more complete in any particular sector and estimate the pass-through to consumer prices to
investigate whether there is any linkage between the pass-through and the average inflation
rate across these countries. The impulse responses indicate that exchange rates have less effect
in the rising mining and natural resources prices in Australia than China and India. Moreover,
pass-through of exchange rate to aggregate consumer prices is greater in China and India than
Australia. This will have important policy implication for the monetary authorities
