The first is that the primary reason the Australian dollar is high compared with its historical average is the large shift in the relative price of commodities I spoke about at the outset. This shift has been to Australia’s advantage, and the high exchange rate has helped us navigate our way through a once-in-a-century investment boom.
The economy has recorded solid growth, the unemployment rate remains relatively low, inflation is consistent with the target, public debt is low and the banking system is sound. Few countries can make such claims. The second is that the types of portfolio flows I talked about earlier do appear to be having an effect here.