RBA Assistant Governor Christopher Kent said in a speech that some factors have contributed to the appreciation of the Australian Dollar since November. The factors include “general improvement in the outlook for global growth” and a “marked increase in many commodity prices”.
Iron ore prices “has increased by around 40 per cent” since early November. And, “historical relationships with commodity prices would have implied a much larger appreciation of the Australian dollar than what’s actually occurred,” he added.
“While history only provides a rough guide, this difference suggests that the Bank’s policy measures have contributed to the Australian dollar being as much as 5 per cent lower than otherwise (in trade-weighted terms),” Kent said.
