ANZ Reserve Bank president Michael Masterson says the central bank’s “more confidence” in the outlook on the Australian dollar is now “far greater” than it had been in the past.
The comments came as the bank’s economic outlook and forecast for the Australian economy are both “more bullish” than they were last week.
But Mr Masterson said the “strong and resilient” Australian dollar was “more relevant to global investment markets than a stronger dollar”.
“The strength of the Australian currency over the past year is a strong reminder that Australia’s strong economic performance has been driven by the strength of its exports and the strength in our international competitive position,” Mr Mastersson said.
“In recent months, the Australian government has increased its exports to China, the biggest source of our exports, and increased its imports from China, in order to maintain and support its position as the world’s largest exporter of goods.”
The Reserve Bank said last week that Australia was the most likely country to miss out on the 2017-18 global economic recovery.
Mr Masterson also said the Reserve Bank’s view on the growth outlook for emerging economies had not changed.
In fact, the bank said it had grown its forecast for economic growth to a 2 per cent annual rate from a 2.5 per cent projection in November.
He said the outlook had changed slightly since the last forecast and it was now more bullish than in November, but that the “slight increase in our outlook reflects the fact that we have now been longer in the recovery than the last two forecasts”.
He did not say when the change in outlook was made, or whether it was because of a “shortfall in confidence”.
The economy, he said, was likely to grow “significantly” this year.
It was not clear whether the Reserve Board would be releasing its forecasts for next year’s quarter or next year.
“We’re doing that now, and we’re going to keep doing that, because we have confidence in our forecast,” Mr Masterson said, adding that the central Bank would not be releasing forecasts for the next two quarters until 2019.
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