High dollar more important than Australian manufacturing, ex IMF boss says

A high, but stable dollar is more important than protecting local manufacturers, the former head of the IMF said at a mining conference.

Speaking at the Diggers and Dealers conference in Kalgoorlie, former head of the International Monetary Fund Rodrigo de Rato praised the role of the Reserve Bank in managing the Australian economy and holding the dollar stable, according to The West.

He explained that their intervention had managed to keep Australia afloat during global instability.

While he would not comment on whether the Reserve Bank should lower the current dollar to help Australian manufacturing out of its current slump, he did say that the dollar's stability is of a greater overall value.

"A stable currency is a very good thing for a country. It allows the absorption of external shocks, and if you don't have the ability to absorb external shocks you suffer much more," de Rato said.

Manufacturing has slipped lower month on month, with the Australian Industru Group and Commonwealth Bank announcing that it recorded a contraction of 2.3 points in July right across all Australian industries.