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Australian dollar still too high: central bank

Xinhua, March 11, 2015 Adjust font size:

Australian's falling dollar is helping the local economy adjust to the end of the mining investment boom, but it is still too high, a Reserve Bank of Australia (RBA) spokesman said on Wednesday.

RBA assistant governor Christopher Kent said the Australian dollar has depreciated by nearly 20 percent since its peak in mid- 2013 and is helping the economy to adjust.

However, Kent continued to support RBA's previous comments, which called for an even lower currency rate.

He said Australian tourism and education sectors will become more cost competitive as a result of a lower dollar.

"While the depreciation seen to date will be helpful, our assessment is that our exchange rate remains relatively high given the state of our overall economy," Kent told a conference.

He held the lower exchange rate, competitive wages and better productivity were good for the economy.

But he said the "economy is currently operating somewhat below its productive capacity."

"The forecast is for a gradual increase in the growth of demand and employment, and eventually a rise in non-mining business investment, supported by the very low level of interest rates," he said. Endi