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Australia Won't Manipulate Record High Currency
Thursday, 21 April 2011

Australia won’t “manipulate” its currency, which has reached a record, and countries that do will “pay a price,” Foreign Minister Kevin Rudd said.

Rudd in an interview ruled out intervention in the so- called Aussie, which has gained 15 percent in the past year against the dollar. Spurred by revenue from shipments of coal and iron ore to China, the currency’s surge has hurt Australian tourism, manufacturing and education.

“We are not in the business of regulating exchange rates,” Rudd told Bloomberg Television in his Brisbane office yesterday, saying the government could assist industries through tax revision and skills programs. “We don’t intend to drift back to anything which seeks to manipulate our exchange rate and those countries that do I think ultimately pay a price.”

Rudd was elected Labor leader in December 2006 and defeated the Liberal Party’s John Howard to become prime minister in 2007. He was ousted by current Labor Party Prime Minister Julia Gillard in June after a late-night showdown within the party over a proposed resource tax and climate change legislation.

Australia has refrained from taking steps adopted by such countries as Brazil to stem currency gains, including limits on capital inflows. The currency rose as high as $1.0751 today, the highest level since it began trading freely in 1983. It traded at 1.0745 at 11:36 a.m. Sydney time.

Countries including the U.S. and Brazil argue that China’s policy of keeping its currency weak gives the world’s biggest exporter an unfair advantage in global trade. Group of 20 finance chiefs meeting in China last month discussed an enlarged global role for the yuan to encourage the government to free up its currency.

 


  

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