The surging Australian dollar, which analysts say is set for a sustained period at or above recent record highs, could cut into national revenues as exports suffer, Treasurer Wayne Swan warned Sunday.
The Aussie is rocketing on the back of an unprecedented mining boom, a strong local economy and exposure to China's growth, zooming up against the US dollar last week to hit a record of 99.18 US cents on Thursday.
The record - the Australian currency's highest level since it was floated in December 1983 - prompted suggestions that the local dollar would tip past parity with the greenback by the end of the year.
Swan said the high Aussie reflected the economy's underlying strength amid a fragile global situation.
But speaking to ABC TV, he admitted that reaching parity would be a bittersweet milestone for Australia and would pose challenges for some industries such as manufacturing, tourism and agriculture.
"Many people, for example, who are buying imported goods would be pleased that they're cheaper but many others, particularly in manufacturing, and also in tourism, would certainly feel the effects of a higher dollar," he said.
Swan added "there may be some impacts on the downside for revenue".
"We'll just have to wait and see as we prepare the budget what the overall net impact of that is," he said from Washington. "There's no doubt that a high dollar will impact on company profitability."
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