Orica CEO Says Australian Manufacturers Need Weaker Local DollarJames Paton
Orica Ltd., the world’s largest maker of industrial explosives, said a decline in the Australian dollar is needed to help manufacturers that are struggling to compete with cheaper imports.
Australia’s central bank should do “everything in their power to get it down,” Chief Executive Officer Ian Smith said in an interview with the Australian Broadcasting Corp.’s ‘Inside Business’ program. “The overall state of the economy is being hollowed out.”
Australia’s dollar on May 10 dropped below parity with its U.S. counterpart for the first time in more than 10 months, three days after the Reserve Bank of Australia cut interest rates to a record low. The Aussie’s stretch above parity, the longest since exchange controls were scrapped in 1983, sparked calls for policy action from union leaders and businesses including Orica and Coca-Cola Amatil Ltd.
“The overall trend for Australia’s sake should be down,” Orica’s Smith said in the interview.
Reserve Bank Governor Glenn Stevens cut the overnight cash-rate target by 25 basis points this month to 2.75 percent and indicated there is scope for further reductions.