- Lower AUD will add a little to inflation
- Inflation higher than though in November
- Inflation expected to be consistent with target
Preview from earlier is here: Speech by Christopher Kent, Assistant Governor (Economic) of the Reserve Bank of Australia (RBA)
Full text: The Resources Boom and the Australian Dollar
More:
- Hard to judge equilibrium level of a$, or what it will do in the future
- Says $A was on high side of fundamentals over the past couple of years
- Although $A will add a little to inflation for a time, still seen within target band
- Lower $A, if sustained, will help economy
Kent used this graphic in his presentation, showing where the AUD is in relation to the RBA’s calculation of its equilibrium level:
