Reserve Bank of Australia Assistant Governor Kent:
- fall in trade-weighted A$ will add only modestly to inflation
- while A$ down 14% on US$ this year, its trade-weighted index has fallen only 2%
- estimate dip in the TWI will add only 0.2 ppt to CPI inflation over a few years
- A$ TWI has moved broadly in line with fundamentals, commodity prices
- broad rise in US$ will raise import costs for many countries
- higher US$ will restrain demand for u.s. goods, commodities and global inflation
- strong US$ of concern to emerging markets with high levels of us$ debt
- Australian offshore debt well hedged, and higher US rates should not affect local bank borrowing costs
- repeats RBAboard expects to increase interest rates further in the period ahead
- size and timing of rate increases will depend on incoming data
Headlines via Reuters
