The aussie (FXA) was overvalued by about 15%, the RBA believed in September, according to...

The aussie (FXA) was overvalued by about 15%, the RBA believed in September, according to documents obtained by Bloomberg (it was in the $1.02-$1.06 level then vs. $1.0236 now). The papers also show the currency to be a popular one among central banks, with maybe 34 holding reserves in it.
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  • Lindsay Sharp
    , contributor
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    The RBA continues to be supine in practical terms in regards to the A$'s international value. It is quite happy to sacrifice the interests of manufacturers and those with overseas derived incomes on the altar of political expediency. The concept that it is 'Independent' is risible. At some point the 'Dutch Disease' will become so apparent that suddenly the RBA will appear 'shocked' and take a flurry of actions, too little and too late. The self-satisfied and arrogant posture of the RBA Governor is almost too oleaginous to watch, unless one has an interest in reptiles. As for either potential Government after September 14- it is too awful to contemplate what they might do. I guess we get the governance we deserve, but why can we not act like the Norwegians have done and create a massive Sovereign Fund that leverages an overvalued currency while it is strong and before the collapse in iron ore prices and coal prices now predicted to begin in about two years' time?
    1 Mar 2013, 05:46 AM Reply Like
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