CANBERRA, Feb 22 (Reuters) - Following are comments by Reserve Bank of Australia Governor Glenn Stevens and other officials at the central bank's twice-yearly testimony before the House of Representatives Standing Committee on Economics.
NB: All quotes are Glenn Stevens, unless noted:
'The other tool that may be available is of course intervention. The truth is, the power of the forces at work here, you need to be pretty confident that it is seriously over-valued, or the market is behaving in some quite irrational way, before you would launch a large scale intervention.
'We haven't done that in this episode.'
'To date here, as I say, my sense is it is too high, but it is on the best metrics I have available to me, it is somewhat too high, but we're not talking 50 percent or something like that.'
DEPUTY GOVERNOR PHILIP LOWE:
'We're ending up with a policy configuration of a very high exchange rates, and low interest rates. And the low interest rates aren't specifically designed to try and get the exchange rate to come down, but they are offsetting the contractionary effects of the high exchange rate on the economy.
'We're ending up with this configuration because exchange rates are relative prices, and the Australian economy is doing relatively better than the North Atlantic economies, where there is very large money creation going on, and very weak economic conditions.'
DOLLAR ON RATES:
'There are at least grounds to suspect that the Australian dollar is behaving a little differently to some of its behaviour that we've been accustomed to. And that matters, that's relevant to the economy.
'If you were to ask me are interest rates, or is cash rate therefore a bit lower than it would have been, the answer to that is yes I would say.'
'I think, at least at the moment, my sense is the appropriate interest rate for the economy's circumstances is in fact the pretty low one we have, not because we face an emergency like we did back then (during global financial crisis), but because we face some other forces of a more slowly evolving nature that combine to mean that the correct rate really is lower than it was a couple of years ago.
'So I'm not uncomfortable with this setting of rates.'
'I'm a bit surprised it hasn't come down more than it has, so perhaps that part of the transmission has changed a little bit. I think people's changed attitude to debt means that we haven't probably seen quite the pickup in borrowing behaviour that you might expect in the past.
'What we're doing is trying to calibrate the level of the cash rate to give us what we hope will be about the appropriate response taking account of the fact that the exchange rate is behaving a bit differently.'
Keywords: RBA STEVENS/HIGHLIGHTS
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