Canberra could intervene in exchange rate: Xenophon

Independent Senator Nick Xenophon is pushing for a Senate inquiry into the impact of the high Australian dollar after declaring it was “situation critical” for the manufacturing sector.

According to News Limited the inquiry would consider whether the Federal Government could intervene in order to bring down the value of the currency.

 

Xenophon said while manufacturers were hurting other parts of the economy were also doing it tough because of the exchange rate.

 

“The major parties need to get their heads out of the sand and grapple with the impact of the high dollar as a key and urgent policy issue,” he said.

 

“The problem with doing nothing is large portions of manufacturing will turn into an industrial wasteland.”

 

“Once they shut their doors it's likely they'll be lost forever.”

 

Xenophon said Canberra could consider approaches used by Swiss and Japanese policy makers, which saw the Government push down the value of the dollar.

 

He also said the Government could consider introducing strategies to cushion businesses from changes in the exchange rate.

 

Despite the new pressure from Xenophon, both the Opposition and the Gillard Government have not put their weight behind any measure to intervene in the exchange rate.

 

The debate follows comments by the Reserve Bank claiming the wider economy was coping well with the high dollar.

 

“I would prefer a lower currency and it does pose some problems for us,” RBA board member John Edwards said.

 

“But I don't think they're at all, at this point, the kinds of issues that require us to make a response.”