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MNI INTERVIEW2: RBA’s Hands Tied If AUD Appreciates-Harper

MNI (Sydney)

The Reserve Bank of Australia has only limited options if the local dollar continues to appreciate against the greenback, board member Ian Harper told MNI on Thursday.

"To the extent that commodity prices are rising, we just live with the consequences of a higher rate because we need the stimulatory effect of higher export earnings, especially when services exports are so low," said Harper, speaking in a private capacity and not as an RBA Board member

"This will outweigh the dampening effect of a higher rate."

There was "not much, if anything, we can do," he said in an interview, as the Aussie rose to just shy of USD72 cents this week, from a low of USD57 cents in March.

RBA Governor Philip Lowe last week repeated his view that he would prefer a lower AUD, but MNI's understanding is that the Bank is unlikely to make any short-term moves to influence the level of the currency.

MNI Sydney Bureau | +61-405-322-399 |
MNI Sydney Bureau | +61-405-322-399 |

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