On CNBC over the weekend, Australian Treasurer Wayne Swan spoke of the ‘headwind’ of the high $A.
- “It is a substantial headwind for some of our industrial sectors in particular, our exporters, our tourism sector and it really affects even our miners’ profits,”
- “real issue” was stimulating growth outside of mining.
- He hinted a further rate cut: “One of the benefits we have is that we can substantially reduce interest rates because the government’s fiscal policy has given the Reserve Bank (of Australia) flexibility to do so,”
- On timing of further rate cuts: “That is a matter for the Reserve Bank. But because we have had strong fiscal policy, and substantial fiscal consolidation, that has given the Reserve Bank room for maneuver,” he added.
Swan Snubs Currency War, Says Strong Aussie a Worry
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Note – futures are pricing in around a 30% chance of an RBA March rate cut.
