Australia’s higher currency and lower interest rates than the economy would normally warrant are unavoidable in an environment of international policy easing, central bank Deputy Governor Philip Lowe said.
“Global developments have left us with a higher exchange rate and lower interest rates than would otherwise have been the case,” Lowe said in the text of a speech in Sydney Thursday. “We may not like this configuration, but developments abroad give us little choice.”
The Reserve Bank of Australia’s board decided in February to cut the cash rate again because economic growth wasn’t picking up as expected, Lowe said. He reiterated that the board, while keeping rates steady at its meeting March 3, noted “further easing may be appropriate over the period ahead.”
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