“Is it time to peg the Australian dollar?”

Here’s an article from this morning … “Is it time to peg the Australian dollar?”

My answer is an unequivocal “NO!”. But … the article is from Adam Carr at Business Spectator, who’s views I have a lot of time for, so its well worth a read. (I am still a “no”, but the article is very good).

It must be emphasised that this is only a second-best solution. Ideally we would live in a world with freely floating exchange rates. This is certainly preferable, and it’s clear that inflation targeting has served the country well.
But the reality is we don’t live in that world anymore. Inflation targeting has been dispensed with globally and currency manipulation is rife. The exchange rate is the target; the monetary system needs to change as a result.