From the AFR:
“We have seen the currency depreciate reasonably versus the dollar and that is probably going to persist for the foreseeable future as China transitions its economy,” BlackRock’s New York-based head of inflation Martin Hegarty…It’s hard to see how policy can ease significantly from these levels and so from a rate perspective, we think they are at neutral territory…You have to believe that with China and other parts of the Asian economy slowing, policies to cheapen the currency down to the low 80¢ make sense. But I question how easy monetary policy can be to influence that…The RBA can see the currency doing a little bit of the work for them and [that] reduces the sense of urgency to act… That being said, given the transition required within the Chinese economy, I don’t think they are totally out of the game at this stage in terms of lower rates,” Hegarty said.
Correct, especially if they embrace macroprudential. But not today, with the squeeze still running on the RBA back flip and positive trade numbers bringing .90 into sight:
Nice one, RBA!
