High Dollar Unfavorable for Exports: IMF

In order to entice exports, the Australian dollar needs to drop by as much as 10%, according to the IMF. The Australian dollar closed at US90.63 cents yesterday. The IMF suggests that the ideal range for the dollar should be between US80 and US85 cents to encourage competition among exporters.

Key international operators in Australia have cited the dollar as a major reason for losses. Last week, Virgin Airlines announced that they will cease to operate flights between Sydney and Hong Kong by May of this year. Toyota, in an announcement yesterday will stop their operations in Australia by 2017. A lower dollar would have cut down costs for both companies.

The Reserve Bank shares the same sentiment with the International Monetary Fund, citing the same dollar range for economic growth in its board meeting last January.

Read more about this on the Sydney Morning Herald website.