SYDNEY, Feb. 15 (Xinhua) -- Recent falls in the Australian dollar may seem like cause for concern, but a top official at the nation's central bank believes that the currency's weakness might actually be helpful for the country's economy.
Speaking at a foreign exchange conference in Melbourne on Wednesday night, Reserve Bank of Australia Assistant Governor Christopher Kent said that given below target levels of inflation, and capacity in the labour market, recent depreciation could be "helpful."
"While the exchange rate is still within the relatively narrow range of the past few years, the recent depreciation is helpful at the margin given that there remains spare capacity in the economy and inflation remains below target," Kent said.
The Aussie dollar started 2019 at its lowest level in three years, and according to Kent, it has seen a 4 percent decline on a trade-weighted basis (TWI) over the past couple of months, with higher commodity prices restricting further falls.
Also in his speech Kent raised concern over flash events in currency markets, such as the Aussie's 7 percent plunge against the Japanese Yen in January, with disorderly moves in key financial markets "bearing close watch."
In the future, Kent said, he expects to see both wage growth and inflation in Australia to gradually increase.
