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RBA's Kent says Australian dollar still too high given commodity prices

Published 09/15/2014, 09:27 PM
Updated 09/15/2014, 09:30 PM
RBA's Kent on Aussie

Investing.com - The Australian dollar remains higher than data suggests given the sizable decline in commodity prices this year, said Reserve Bank of Australia Assistant Governor Christopher Kent on Tuesday.

"The exchange rate has declined somewhat relative to its peak in the first half of 2013," Kent said in a speech at the Bloomberg Economic Summit in Sydney.

"But it remains high, especially given the sizable decline in commodity prices this year,."

"A further decline in the exchange rate would provide additional support to demand for domestic firms producing tradable goods and services," Kent said.

"At the same time, however, the high exchange rate also means that imported capital goods are currently relatively cheap. Hence, the still-high level of the
exchange rate may be a net positive factor for the investment plans of some firms in non-tradable industries."

"In short, the high exchange rate might be playing a part in restraining investment in some sectors of the economy, but it's unlikely to be the full story," Kent said.

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