The Reserve Bank of Australia boss has warned investors that the Australian dollar is still high and will eventually fall from its historically high levels.

“These levels of the exchange rate are not supported by Australia’s relative levels of costs and productivity,” RBA governor Glenn Stevens told a Citi Group investment conference in Sydney on Tuesday.

“Moreover, the terms of trade are likely to fall, not rise, from here.

“So it seems quite likely that at some point in the future the Australian dollar will be materially lower than it is today.”

The Australian dollar stayed above parity with the US dollar for most of the time between 2011 and May this year.

The currency was supported by a combination of record high commodity prices, the safe haven appeal for Australian bonds and relatively high interest rates.

However commodity prices are steadily falling, the RBA’s cash rate has been cut by two per cent since 2011 and the Federal Reserve is expected to taper its bond purchase program next year.

The Australian dollar is currently around 96 US cents, compared to its post-float average of 75.5 US cents.

Mr Stevens said a lower exchange rate will help the Australian economy move away from one mainly reliant on mining investment.

Retail spending, local tourism and manufacturing are sectors that have suffered from the high Aussie dollar.

National Australia Bank senior economist David de Garis said the RBA governor is ramping up the rhetoric on the persistently high local currency.

“Clearly there is a degree of frustration building there,” Mr de Garis said.

“The bank noted their expectation that part of balanced growth would be expansion in some of the trade-exposed sectors that have been squeezed by the high exchange rate.”