Australian dollars were trading on the dollar exchange rate at $US1.21 on Tuesday after plunging to a record low of $US0.95 per Australian dollar.
The currency also dropped to US$1.18 per Australian Dollar by midday, down by 8% in a matter of hours.
The currency fell in the first two weeks of 2018 amid a spike in the price of crude oil, which has been a key contributor to the Australian dollar’s slide.
In a statement, the Reserve Bank of Australia said: “The dollar is now trading at a record-low 1.21 per Australian dollars (US1).”
The recent decline in the value of the Australian Dollar has been driven by significant and persistent weakness in the Australian currency.
“Key points:The dollar fell by 8.8% in one day to US1.20The Reserve Bank said the devaluation in the dollar was due to the weakening of the dollar’s global currency status, and that the current exchange rate is “a reflection of this weakness”The dollar also dropped on Wednesday by around 6% to US0.9 per Australian Dollars, the lowest rate since March 2019, and fell by around 5% on Thursday by around 9% to $US9.27.
Aussie dollar is seen as a safe haven currency and has attracted investors in recent years, but its volatility has pushed its value below the $US3 mark.”
While we expect the Australian dollars will continue to remain highly volatile, there is still some reason to believe that the Australian economy can absorb the recent devaluation,” the Reserve said in its statement.
It added: “We believe that a return to the US dollar’s value in the coming months will be beneficial to the economy as it will allow for more flexibility in exchange rates and therefore better utilise the dollars available.”
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