A rising Australian dollar has worked against local shareholders of BHP Billiton Limited (ASX: BHP) by reducing the amount of dividends they will receive for the recently completed half-year period.

In an announcement to the market yesterday, the mining giant confirmed it would pay a fully franked dividend of US16 cents per share for the six-month period ended 31 December 2015. That’s down nearly 75% compared to the US62 cent per share dividend declared in the prior corresponding period.

As a result of plummeting commodity prices and a negative outlook for the resources sector as a whole, BHP was forced to cut its distribution to shareholders or else face the prospect of further cuts to its credit rating from the Standard & Poor’s.

Of course, many investors will be disappointed with that payout – especially considering the miner had committed to a ‘progressive dividend’ policy in which it promised to either increase or at least maintain its dividends at every six-month interval. However, others will see it as a good move by management in order to strengthen its balance sheet.

Given that BHP reports its earnings and dividends in US dollars, Australian investors benefit when the local currency weakens (whereby each US currency unit can buy more Australian units). Unfortunately, the Australian dollar has actually surged in value over the last two months or so, reversing some of that currency tailwind for local investors.

The dividend paid to Australian shareholders will be 21.4 cents per share, based on the exchange rate of US74.88 cents as of the record date on 11 March. The local currency was trading at a six-year-low of US68.28 cents as recently as January, at which rate local investors would have received 23.4 cents per share instead.

Still, the dividend will be paid to eligible shareholders on Thursday March 31, 2016.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.