The interventions in the currency market to weaken the Australian dollar are likely to be either ineffective or it will result in greater macroeconomic instability, the Treasury said in its latest Economic Roundup on Friday.
"Calls for Australia to shift away from its long-standing policy approach and take action directed at lowering the value of the AUD are misplaced," it said.
The best way to curb currency appreciation is through interest rate reduction, the treasury observed.
"If the high exchange rate is judged to be inconsistent with keeping the economy close to non-inflationary full employment, we could expect that monetary policy would be eased in response, putting downward pressure on the AUD," the treasury said.
Since November last year, the Reserve Bank of Australia has reduced rates by a cumulative 125 basis point. The cash rate was left unchanged at 3.5 percent in August.
For comments and feedback contact: editorial@rttnews.com
Economic News
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.