The Australian dollar has fallen after a Reserve Bank assistant governor said the currency was still overvalued.
RBA assistant governor Guy Debelle's comment that the Australian dollar was higher than it should be initially gave the currency a boost.
But minutes later, it fell from 87.63 US cents to 87.55 US cents.
Dr Debelle said the Australian dollar was overvalued despite falling by about six per cent against the US dollar in September.
"The Australian dollar has depreciated in recent weeks, but on a tradeweighted basis is only back to levels of earlier in the year," he said.
"Over that same period, Australia's terms of trade has continued to decline and some key commodity prices for Australia, most notably the iron ore price, have declined considerably.
"On that basis, the Australian dollar is still higher than most conventional estimates of fundamentals would indicate, notwithstanding its recent decline."
Dr Debelle was speaking at the Citi Annual Australian and New Zealand investment conference in Sydney on Tuesday.
Share
