Plea to Reserve: force dollar down

Orica chief Ian Smith says local manufacturers are folding under the weight of the dollar. Picture: David Geraghty Source: News Limited

AUSTRALIA'S central bankers should do "everything in their power" to force the dollar down, Melbourne-based Orica chief Ian Smith said.

 Orica, the world's largest maker of industrial explosives, said it was hard for manufacturers to compete and export with the dollar consistently higher than the benchmark US currency.

"For the sake of Australia and jobs into the future, we can't keep hollowing out the overall economy the way we are," Mr Smith told ABC-TV.

The Australian dollar dropped below parity with the US currency on Saturday for the first time in 10 months.

That was a record stretch above parity for the dollar since exchange controls were dropped in 1983.

The Aussie was just above parity at 1.0025c last night.

"We'd love the exchange rate to keep going down," Mr Smith said.

Orica's first half net profit rose by 6 per cent to $267 million.

Mr Smith said local manufacturers were folding under the weight of the dollar.

"We have contact points right through the manufacturing base of chemicals etc in Australia, and a lot of those smaller manufacturers, distributors are being pushed out of business. "They can't compete against imports. Manufacturing has been belted for an enormously long time because of this high dollar or whatever.

"We've actually got to put some settings in place now so we do have a sector that can grow jobs."

RBA Governor Glenn Stevens cut the cash rate to 2.75 per cent last Tuesday.

He also flagged there was "scope" for further cuts.

There was renewed focus on the global currency at the weekend at the meeting of the Group of Seven in the UK after the US dollar overtook the 100-yen barrier for the first time in five years.

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