21 Nov 2013
RBA's Steven's signalizes possibility of FX intervention to weaken AUD
FXstreet.com (Barcelona) - Reserve Bank of Australia governor Glenn Stevens said on Thursday that the central bank counts FX intervention among the possible measures to stimulate the economy, but that doubts remain as far as the effectiveness of such an action is concerned, versus its cost.
“That doesn’t mean we will always eschew intervention,” Stevens added however. “In fact we remain open-minded on the issue. Our position has long been, and remains, that foreign exchange intervention can, judiciously used in the right circumstances, be effective and useful.”
On Thursday the IMF suggested that the aussie dollar was overvalued by 10% and that the RBA should maintain an accomodative monetary policy to minimize the drag on economic growth.
Following Stevens's comments the AUD/USD slid to 0.9270 from 0.9290 at which it stood earlier.
“That doesn’t mean we will always eschew intervention,” Stevens added however. “In fact we remain open-minded on the issue. Our position has long been, and remains, that foreign exchange intervention can, judiciously used in the right circumstances, be effective and useful.”
On Thursday the IMF suggested that the aussie dollar was overvalued by 10% and that the RBA should maintain an accomodative monetary policy to minimize the drag on economic growth.
Following Stevens's comments the AUD/USD slid to 0.9270 from 0.9290 at which it stood earlier.