SYDNEY: A top Australian central banker on Tuesday said intervening on a large scale to bring down the high local dollar would be a very big step which would only be taken "in extremis".
Asked about the chance of selling the Australian dollar to bring it lower, Reserve Bank of Australia (RBA) Deputy Governor Philip Lowe said a floating currency had been of huge benefit to the country and tampering with that by intervening could have adverse consequences.
Answering questions after giving a speech on the economy, Lowe said he was a bit surprised the Australian dollar had not eased in recent months given there had been sharp falls in the price of some of the country's key commodity exports.
Yet he also said it was hard to argue that the currency was fundamentally overvalued or that it was harming the local economy in a serious way.
The strength of the Australian dollar has crimped some sectors such as manufacturing and tourism and prompted calls for the central bank to act to bring it down.
Lowe said the fall in prices for some of Australia's commodity exports had led to some pullback in mining investment plans.
As a result he now expected the boom in mining investment to peak around the middle of next year, instead of near the end of the year.
Comments
Comments are closed.