RBA's Stevens says exchange rate disconnected from fundamentals


Australia's current exchange rate is not supported by the country's relative levels of costs and productivity, Reserve Bank of Australia (RBA) governor Glenn Stevens said today in a speech in Sydney.

Stevens added that the terms of trade were more likely to fall than rise, implying the Australian dollar will be "materially lower than it is today" in the not-too-distant future.

He also argued the exchange rate has had a significant impact on RBA's balance sheet, saying it "led to a decline in the

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