Australian newspapers have been blocked from using the Australian dollar, after Beijing banned the country’s national currency.
The move follows a series of attacks by China on Australia’s financial system, including the largest-ever theft of trade secrets from Apple Inc. in December, a $1.9 billion hack of the banking system and the theft of sensitive information about the Federal Government’s National Broadband Network.
The ban on the Australian currency was announced on Friday by the Financial Services Commission.
The ban was prompted by a report by Australian Financial Review, a business publication.
A spokesman for the FSC said it would be a “difficult and time-consuming process” to reverse the ban, but would be completed in due course.
“The commission will continue to monitor the situation closely to ensure it is being implemented in a manner that respects the interests of the Australian community and the interests and protection of Australian financial institutions,” the spokesman said.
Australia’s dollar fell as much as 6 per cent against the U.S. dollar in late afternoon trading, falling as much $0.4 to $US1.29, or 2.2 per cent.
The collapse of the Chinese currency is expected to be felt on the trade balance of the world economy.
The global economy has been hit by a severe downturn, with the global stock market down more than 10 per cent this year.
Australia is the second-biggest economy in the world, after the U, with a trade surplus of $US3.4 trillion.
The country’s exports have also been hit badly by the collapse of Chinese demand for commodities and services.
Australian Treasurer Scott Morrison said the Chinese move would cost jobs and hurt the economy.
“China is using its currency to steal jobs, destroy our competitiveness and damage our way of life,” he said.
“What they’re doing is using their currency to drive up the price of commodities in a way that it’s not really good for Australia’s economy.”
Australia’s financial services industry was one of the most heavily affected by the theft.
The Financial Services Council of Australia said the move could damage its “legitimate competitive position” and cause “significant job losses”.
“The loss of significant investment and employment is a real and significant risk to the sector, and our view is that this is an area that needs to be addressed,” it said in a statement.
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