What will the inflation rate would be if the exchange rate keeps at this low level and the interest rate keeps at record low?
It is amazing that these so-called analysts try to talk up something in this way.
IMO, inflation rate will start to pick up this year. Chinese is buying more and more Australian products because those products are relatively cheap and of much better quality.
For example, people are complaining about chinese buying up baby formulas in the super markets, and making Australian parents hard to buy cheap baby formulas. Many people do not realize this is mainly due to the relatively lower exchange rate of Australia dollar. Soon, the supermarkets and the suppliers of those products will raise the prices to meet the higher demand. More examples are Lobsters, beef ..........
In a word, inflation will be high if the Australian dollar exchange rate is low. Of course, property investors will be happy. But the RBA will be pressured to raise the interest rate unless the ABS keeps pumping out the manipulated inflation figures.
