Current Business Issue report Essay

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The Advantage of Reduced Currency Rate in Recovering
Global Financial Crisis (GFC)

Soo Lin Tan

Subject: Current Business Issue

Executive Summary

This report was appointed to examine the unseen catastrophe of a higher Australian dollar and its role in global economy as well as the advantages that might attain from a lower exchange rate.
The research draws attention to the fact that in 2009, the economy growth has decreased to around half a per cent and the unemployment rate has escalated to around 5.75 per cent, despite the impact of the GFC on Australia was substantially lesser than in other countries,. While Australian currency reached a peak of over US $1.10 in 2011, it has raised the concern over the impacts of the high exchange rate on trade-exposed sectors and led to a lower expense on household goods. This situation deteriorates when news on factory closure and reduced incomes for semi-retired Australians has come out recently.
Further investigations reveal that the slowing trend in various export industries coincided with an increase in Australian currency, which caused a lower demand from other countries that have a lower exchange rate. Conversely, a significant increase in number of overseas property investor has shown when the Australian dollar exchange rate fell below US$ 0.90 in August 2013.
The report assesses this range and determines that it would be an ideal alternative to lower the Australian dollar in order to strengthen its competitiveness in global economy. Recommendations discussed include:
• Discover a new economic growth scheme instead of concentrating on mining industry.
• A lower currency to be maintained so as to expand the demand of export and retain its competitiveness.
• Provide affordable budget plans to encourage locals spending, as well as design fascinating packages that will also assist in boosting the foreign tourist figure.
• Create more schemes to attract investors from other countries.

Table of Contents

Title…………………………………………………………………………………………...i
Letter of Transmittal………………………………………………………………………….ii
Executive Summary…………………………………………………………………………..iii
Table of Contents…………………………………………………………………………….iv

1. Introduction...………………………………………………………………………...1
2. Background...………………………………………………………………………....1
3. Issues and Problems………………………………………………………………….2
4. Discussion……………………………………………………………………………..2 4.1 Australia Currency vs. Export…………………………………………………2 4.2 Australia Mining Industries……………………………………………………3 4.3 Australian Dollar (AUD) vs. China Yuan (CNY)……………………………..4 4.4 Australia Tourism Industry……………………………………………………5 4.5 Australia Real Estate…………………………………………………………..6
5. Conclusion…………………………………………………………………………….6
6. Implementation……………………………………………………………………….6
7. References ……………………………………………………………………………7

1. Introduction
According to the Central Intelligence Agency (The World Fact Book, 2013), Australia had been experiencing economic growth for more than 20 years, especially when demands for natural resources from Asia and foreign investment increased dramatically in recent years. The sustained high Australian dollar has led to significant argument about its effects on the Australian economy. The purpose of this report is to investigate the latent crisis of a higher Australian dollar and its role in global economy as well as the advantages that might obtain from a lower exchange rate.
The major industries in Australia and its economy relationship with other countries, particularly the main importer, China, were considered in terms of fluctuating prices of resources and its effects on demands for merchandises from foreign countries. Recent case of plant closures due to high Australian dollar has also covered in this report.
Information was gathered from the government websites, research reports and other academic sources with graphs and data. These were complemented by commentaries of current financial situation and Australian currency.
In this
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