Manufacturing News

Dollar at 60 US cents wouldn’t have helped manufacturing: RBA

A report by the Reserve Bank of Australia has
suggested that a fixed exchange rate of about $US 60 cents would’ve done little
for Australia’s manufacturing industry.

Fairfax Media reports that the RBA’s paper Exchange Rate Movements and the Australian Economy
modeled that a low exchange rate would not have significantly changed the sector’s
output, which had decreased in relative size due to broader “technological and
economic factors”.

The report looks at the terms of trade boom in
the last decade, fuelled by resources exports, and finds a fixed rate would’ve
benefited business and personal services sectors, but would have changed output
in mining, manufacturing and construction very little.

Manufacturing would’ve benefited early on in the
boom years, but overall, “At most, according to this scenario, a weaker exchange rate would have reduced the pace of [its] decline.”

The Australian dollar was at $US 87.19 cents at 7
am this morning, according to AAP, having fallen to a near-four-year low yesterday.

Image: ABC

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