THE NEWS WRAP: RBA not ruling out currency intervention to combat strong dollar

Reserve Bank governor Glenn Stevens has warned the central bank is willing to intervene in currency markets to combat the persistently strong Aussie dollar.


“But what of recent levels of the exchange rate? They have been blamed for many disappointing corporate results and triggered numerous restructurings, instances of ‘offshorings’ and job shedding,” Stevens says.


“Our position has long been, and remains, that foreign exchange intervention can, judiciously used in the right circumstances, be effective and useful.”


Treasury chief predicts living standards growth to slow over the next decade


Treasury chief economist David Gruen has forecast Australians’ living standards will grow at a significantly slower pace over the next decade, in a speech to the Australian Business Economists’ annual conference.


While household income has grown by 2% each decade over the past five decades, it is set to expand at just 1% over the next 10 years.


You are dealing with a world in which living standards are going to grow significantly slower than anything we’ve seen in our lifetimes,’’ Gruen says.


‘‘Our estimates say that if we achieve productivity growth similar to its long run average, the next decade will see the slowest income growth in Australia for half a century by a lot.’’


Cheese wars: Murray Goulburn looking at partial listing to fund Warrnambool bid


The Murray Goulburn Co-operative has written to its shareholders saying it is looking at a partial listing in order to fund its bid for Warrnambool Cheese and Butter.


Murray Goulburn, which trades under the Devondale brand, is an agricultural producers’ co-operative, with the farmers that supply it with milk also owning all the shares in the company and electing directors on a one-member one vote basis.


In a letter to the company’s farmer-shareholders, managing director Gary Helou says that while the co-operative is not looking to completely demutualise, raising additional equity from outside investors is one of the options it is looking at.


‘‘All these groups want to make sure that they use their co-operatives’ benefits, and any access to external capital they need to be on top off,’’ PAC partners agribusiness analyst Paul Jensz says.


‘‘If their peer is doing the same thing they don’t want to be at a disadvantage when and if interest rates go a certain way or risk tolerance with equity investors changes as well.’’




The Dow Jones Industrial Average is up to 0.67% to 16006.94. The Aussie dollar is down to US 92.26 cents.


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