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RBA Remains Open-Minded On Currency Interventions, Stevens Says

The Reserve Bank of Australia remains open-minded on the currency interventions, Governor Glenn Stevens said Thursday.

Stevens said, "Our position has long been, and remains, that foreign exchange intervention can, judiciously used in the right circumstances, be effective and useful."

The currency intervention remains part of the toolkit, he added. But it cannot make up for weaknesses in other policy areas and to be effective it has to reinforce fundamentals.

Intervention in the foreign exchange market involve selling Australian dollar and buying foreign assets. In this episode so far, the bank has not been convinced that large-scale intervention clearly passed the test of effectiveness versus cost, he noted.

Further, Stevens said "the Australian dollar is currently above levels we would expect to see in the medium term."

by RTT Staff Writer