Economy

The Australian dollar has reached an all-time high against the Greenback and is now buying slightly more than one US dollar. One of the main results of the Fed’s previous money printing adventures has been to drive up the price of commodities, which benefits Australia’s commodity exports.

Although recent newspaper headlines might lead you to think otherwise, Australian and international businesspeople think Australia’s economy is best placed to survive the international crisis.

Despite the downturn, Australia’s retailers are enjoying better times and the country’s trade surplus with the rest of the world is increasing. It’s not all good news though, as banks’ bad loans rise to a 16-year high.

As other economies have fallen prey to recession, Australia’s has continued to grow, albeit at an ever decreasing pace. Last week, finance minister Wayne Swan said the economy’s prospects had taken a turn for the worse.

The Worldwide Cost of Living survey compares the cost of living in 140 cities worldwide. In each city field researchers gather and return a range of prices for over 160 items, from a loaf of bread to a luxury car.

Australia’s Reserve Bank has announced another sharp interest rate cut, from 6 percent to 5.25 percent, the lowest rate since December 2003. Today’s cut brings to 2 percentage points the total interest rate cuts since the bank started cutting rates.

Australia has placed first in a prosperity index of more than 100 countries. A combination of the country’s economic competitiveness and liveability pushed it to the top of the tree.

At its meeting today, Australia’s Reserve Bank decided to cut its key interest rate sharply from 7 percent to 6 percent. It does not look likely that Australia’s retail banks will pass on the full one percent cut to their customers.