RBA would like to see lower Aussie dollar

Reserve Bank governor Philip Lowe would like to see the Australian dollar even lower after retreating from its recent flirtation with 80 US cents.

The passing of a $US1.9 trillion stimulus package in the United States has lifted the US dollar against all currencies, and has seen the Australian dollar ease to around 77 US cents.

“I would be more comfortable if it was lower still because we need to get the unemployment rate down, inflation back to target and a lower currency would help us get there,” Dr Lowe told the Australian Financial Review Business Summit in answer to a question.

However, he said the currency is not overvalued with commodity prices very high and interest rate differentials stable.

“So I understand why the currency is where it is. I would like it to be lower though, but we don’t have the tools to deliver that,” he said.

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