Ann: Shaw and Partners Emerging Leaders Presentation, page-39

MaybeI should have qualified about interest rates - I am not referring to official RBI rates but what the market charges. market rates are determined by official rates only in an economy with sufficient savings. Australia is a net importer of capital and the major economies are just past the bottom of the interest rate cycle. The major banks have raised rates recently despite no moves by the RBI.

The A$ is down because growth is picking up in the US and EU and the US FED has clearly signalled a rate rise cycle and that has pushed the US$ up. The RBI is not going to raise rates in a slowing economy which is also why the A$ is falling and this increases import prices (and boost exporters). Property prices have risen above trend and in absence of big productivity gains. It is not obvious what is going to drive growth in the short term. I quite agree that it is hard to predict macro forces but unless Trump or Turnbull (or both) set off an infrastructure splurge the economy looks certain to slow down.