RBA will not intervene in currency market

Friday 24 August 2012

Article by Mozo

The Reserve Bank of Australia (RBA) has ruled out intervening in the currency markets to lower the value of the Aussie dollar.

RBA will not intervene in currency market

Officials at the bank said that despite the dollar being at a record high, European-style currency intervention was not an option currently on the table.

The bank's governor Glenn Stevens claimed that buying up huge quantities of foreign currency to stabilise the dollar would be far too risky for taxpayers.

However, he has not ruled out buying up foreign currency in the future.

In an official statement, Mr Stevens said: "In extremis, you can argue it should be done but it's a big call and it's not a call we feel should be made at this point in time."

Since the global financial crisis struck in 2008, the value of the Australian dollar has risen by around 70 per cent.

This is great for Australian travellers heading overseas, but less good for industry, who can struggle to export relatively high-cost goods to other nations.

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