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Strong Aussie Good For Consumers, Says RBA
Submitted by Tradervox 2 on Wed, 13/06/2012 - 11:52
Tradervox (Dublin) - Glen Stevens, the Reserve Bank of Australia Governor, indicated in his statement to economic forum meeting that a strong Australian dollar is beneficial to consumers in the country. He said that the trend may be maintained with the growing mining industry hence the need for businesses to adapt to this change. In his statement in Brisbane, the Governor said the strong currency is a test of adaptability for companies adding that he was aware of the number of sectors that might be struggling due to this strong exchange rate. However, he remains reluctant to put measure in place to weaken it.
In his statement he said that consumers of gasoline, consumer goods, and those traveling overseas are enjoying lower prices as a result of the strong currency. He urged members participating in the forum to discuss the impact of the local dollar on the nation’s economy as he opened the economic forum. As the government led by Prime Minister Julia Gillard struggles with measures to reconcile public pessimism, RBA governor sought to dispel fears of a strong currency saying that this is a way of spreading the profits from the resource boom in the country. Australia is currently the fastest growing economy among the developed economies. A report has shown that consumer confidence remained at the lowest level despite RBA lowering borrowing cost by 0.75 percent in the last two meetings to 3.5 percent.
The Australian currency has strengthened as demand for its minerals from China and India increases. As the mining and energy sectors grow at an alarming rate, manufacturing, tourism, and retail sectors have weakened considerably causing public concerns. This has led to low consumer spending and dissatisfaction among households in the country. According to technical data, the Australian currency has increased by 75 percent in the last ten years as demand from Asian nations such as India and China continue to increase. The Aussie increased by one percent yesterday and has remained unchanged today buying 99.43 US cents.
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