The Bank’s previous monetary policy was sometimes questioned by other countries, which later revised their judgments after experiencing a situation similar to that faced by Japan after the bubble economy burst in the 1990s. It might therefore be premature to assess the effectiveness of QQE solely from the money market reaction since early April.
And the final observation is more directly about the link between monetary policy and the exchange rate. It has been argued in some quarters that Australia’s high interest rates by current world standards have put upward pressure on the exchange rate, and thus have added to the pressures being experienced in some industries.