Economy coping well with strong dollar: RBA

The Reserve Bank has continued to play down the impact of the high dollar, and claims the broader economy is coping well with the challenge.

The Reserve Bank has continued to play down the impact of the high dollar, and claims the broader economy is coping well with the challenge.

In an interview with The Australian RBA board member John Edwards said while the exchange rate was hurting exporters and manufacturers, the pain wasn't enough to warrant immediate interest rate cuts.

 

“I would prefer a lower currency and it does pose some problems for us,” he said.

 

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

 

Edwards also said the low unemployment rate showed conditions in the wider economy were “pretty good”.

 

“… It's much less of a policy problem for us than if we had a combination of a very high unemployment rate and very high exchange rate,” he said.

 

RBA members have previously released divergent opinions on the impact of the high dollar, but historically the bank has been a moderating voice in debate over the exchange rate.

 

But despite the RBA stance local manufacturers continue to blame the high dollar for difficult trading conditions, and Holden recently highlighted the issue as contributing to its decision to axe 500 workers.