Reserve Bank of Australia Governor Glenn Stevens said that while the central bank has been unconvinced about the effectiveness of trying to drive down the Aussie, he remains “open-minded” on currency intervention.
“That doesn’t mean we will always eschew intervention,” Stevens said in a speech in Sydney late yesterday. “We remain open-minded on the issue. Our position has long been, and remains, that foreign exchange intervention can, judiciously used in the right circumstances, be effective.” In testimony in February he said the exchange rate would need to be “seriously overvalued” before considering moves to weaken it.
Australia’s currency dropped on the remarks. It climbed almost 50 percent in the four years ended Dec. 31 as the nation escaped the 2009 global recession and a China-led mining investment boom spurred growth. That squeezed manufacturers and tourism operators in Australia’s southeast, spurring job losses at companies including Ford Motor Co.
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