This part of the transmission mechanism appears to be operating pretty much as normal, with the increase in activity over the past 1½ years being in line with our internal forecasts made in the second half of 2013 when the cash rate was first set at 2½ per cent.
This increased activity is boosting employment in the sector and having flow-through effects to spending on homewares and related items. BIS central bankers’ speeches  5  The exchange rate channel of monetary policy is also working. There are some signs that the depreciation of the Australian dollar is boosting domestic activity, with net exports of services increasing strongly.