Philippines buys Australian dollars (and production)

From the AFR:

The finance secretary of the Philippines has confirmed his central bank is buying Australian dollars, despite Reserve Bank of Australia documents released this week which said the island nation was not a buyer.

“The Australian dollar is part of it and an increasing part of it,” Finance Secretary Cesar Purisima toldThe Australian Financial Review on a visit to Sydney, in a reference to the central bank’s foreign reserves.

At the end of 2011, 3.1 per cent of Filipino foreign exchange reserves were held in Australian dollars, up from 1 per cent in 2005.

If that level were maintained, the Filipino central bank could now own up to $US2.2 billion of its $US70 billion in non-gold reserves in Australian dollars.

Comments

    • It’s not all about jobs. For example, if a bulldozer can do the job of a 100 men, do we ban the bulldozer so 100 people can keep their jobs? No we invest in capital because it improves productivity.

      Similarly, a high exchange rate allows us to import goods and services at a cheaper price. This lowers are cost of living and cost of production and that’s the best thing about a strong currency. Sure there’s a bit of pain in the weakest export industries but that’s how the economy restructures and specialises over time.

      • Good story bro.
        What’s your version of Oz society gonna end up look like?
        1% of the population control an army of robotic workers that provide all the producitivity, while 99% queueing outside CentreLink?

        • There’s always a productive use for labour in an economy. Look at all the technology that has removed the need for labour, yet people are still employed.

          • Sorry boys but Capitalist is right. Technology does not destroy jobs. It makes goods cheaper which means more people can afford them which means more people buy them. Virtuous circle.

          • you guys are talking about short term. if you never look beyond 5 or 10 years, of course everything will be just fine.

            remember it’s a finite world we live in. we can’t keep living like this, keep growing forever.

            Technology improves efficiency, that’s a fact. At some point in the future, a tipping point will be reached. It could be 100 years from now. We’d be all dead by then.

            You probably wouldn’t care. But I do.

  1. In a QEinfinity world this is part of the new normal, but “despite Reserve Bank of Australia documents” is again my beef that we have little transparency. You might call that honesty as well and I won’t object.