Ric Battellino, the deputy governor of the Reserve Bank of Australia, on Friday said Australia's floating exchange rate policy was a key factor in insulating the economy from external shocks during the recent financial crisis.

"The Australian dollar has played an important countercyclical role by rising and falling in response to various external events that otherwise might have had the potential to destabilise the domestic economy," Battellino said.

Battellino said the Australian economy over