The downside to a lower Australian dollar

The Reserve Bank's focus on a lower Australian dollar to reinvigorate manufacturing hurts companies reliant on imported raw materials, and may prove futile.

The RBA has made a lot of noise about the economic benefits of a lower Australian dollar recently and most businesses involved in the local tourism sector, and exporters in general, agree a lower currency would help them remain competitive.

Some manufacturers might beg to differ however. In theory a lower Aussie dollar can help make locally-manufactured goods more competitively priced compared to imported goods. In reality, things aren’t so simple.


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