A stronger Australian dollar could alleviate inflation pressures and potentially limit the extent of interest rate increases by the Reserve Bank of Australia (RBA), according to Bendigo Bank chief economist David Robertson. Bendigo and Adelaide Bank is an Australian financial institution, providing a range of banking and financial services. The bank operates through an extensive network of branches and provides services for personal, business, and community customers.
Robertson noted that the bank had anticipated a rise in the currency for several months. He added that the rally has occurred somewhat earlier than initially projected. This timing mirrors the RBA’s rate hikes, which Bendigo Bank had previously anticipated in 2027, rather than this year.
“More positively, the higher exchange rate will be helpful for inflation and is one of the reasons we still expect stable RBA rates for the balance of 2026, leading into a lift in growth and productivity in financial year 2027, assisted by the recent uplift in tech business investment,” Robertson stated. The economist’s comments suggest that a stronger currency could play a significant role in managing inflation and influencing future monetary policy decisions.
