Australia’s export commodity prices were little changed in March.
The Reserve Bank of Australia’s index of commodity prices rose 0.2 per cent in the month in foreign currency terms to be down by 16 per cent from its peak in July 2011.
However, they are still 200 per cent higher than – that is, three times the level of – a decade earlier.
The decline in commodity prices from their peak was noted in the statement, on Tuesday from the RBA board, confirming expectations that interest rates would not be moved.
The RBA said the Australian dollar “remains higher than might have been expected, given the observed decline in export prices”.
The stubbornly high exchange rate is one factor supporting the view that the RBA may eventually cut the cash rate from its current 50-year low of three per cent.
The central bank said on Tuesday that it had scope to do if necessary, given the benign inflation outlook.
The foreign currency price index is measured in terms of special drawing rights (SDRs), an average of four major currencies – US dollar, euro, Japanese yen, and British pound.