Falling dollar may mean RBA leaves rates on hold

Property Prices

The Australian dollar has fallen to a five-year low of 80.71 US cents and it’s fast approaching the level the RBA has spent most of 2014 saying is desirable. 

Reserve Bank governor Glenn Stevens says an Australian dollar value of around 75 US cents would be appropriate and if it does continue to head that way we could see it stave off any rate cuts that have been predicted recently.

The lower Australian dollar is stimulating parts of the economy and in a further boost, falling petrol prices have added to the momentum.

CommSec chief economist Craig James said on Brokernews that the ‘double whammy effect’ of a weak Australian dollar and falling petrol prices could see interest rates stay where they are for the foreseeable future. 

“The economy has moved in precisely the right direction in the past few months,” he said.


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