Manipulative bastard: RBA's governor wants to further crash the dollar

Reserve Bank of Australia governor Glenn Stevens has indicated he wants an Aussie dollar closer to 85 US cents, while pointing to "promising signs" that the economy is transitioning away from the mining boom.

But he said that turning the lower currency into a real depreciation that spurs growth would require real wage cuts.

The currency continued its recent slide overnight, falling below 90 US cents to be trading around 89.30 US cents this morning. On Thursday it closed at 90.31 US cents.
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In an interview with The Australian Financial Review, just weeks after explicitly declaring currency intervention to be part of his "toolbox", the governor told the Financial Review he would prefer a lower dollar over lower interest rates as a mechanism to spur the economy.

"To the extent that we get some more easing in financial conditions, at this point it's probably more preferable for that to be via a lower currency at the margin than lower interest rates," he said.

He said with the falling terms of trade, he expects the Australian dollar's natural level to be lower than its current rate, which was US90.24¢ on Thursday. "I thought [US]85 cents would be closer to the mark than [US]95 cents . . .but really, I don't think we can be that precise.

"I just think that if things over the medium term evolve as we're presently assuming – and I think it's reasonable to make these assumptions – it's going to be surprising if a nine at the front is the right number," he said.

Read more: http://www.smh.com.au/business/the-economy/glenn-stevens-says-aussie-dollar-needs-to-fall-further-20131213-2zapf.html#ixzz2nKInj4qD

Manipulative bastard: RBA's governor wants to further crash the dollar

Manipulative bastard: RBA's governor wants to further crash the dollar

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