Indeed, in our case, the exchange rate has become the great stabiliser of the Australian economy, arguably playing a more important role than monetary policy in dealing with the major shocks that we have experienced over recent times. There are a number of features of our economy and financial markets that have led to this position.
The economy added over 1.6 million jobs during 2011, and the unemployment rate fell nearly a full percentage point. Interestingly, the last time the unemployment rate fell by this much in one year was in 1995.