Mighty Aussie Lets Stevens Stem Prices, Avoid Controls
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At a time when nations from Japan to Brazil are struggling to keep currency gains from damaging their economies, Reserve Bank of Australia Governor Glenn Stevens is welcoming a stronger exchange rate.
Australia’s dollar has advanced 19 percent since the end of June, the most of the 16 major currencies tracked by Bloomberg data, reaching parity with the U.S. dollar last month for the first time since July 1982. The rally may help curb inflation as sales of iron ore and coal to China bring in fewer local dollars. When Stevens surprised investors by boosting interest rates on Nov. 2, he said in a statement that the rising currency “will assist, at the margin, in containing pressure on inflation.”