Fall in Australian Dollar to Benefit International Students
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Fall in Australian Dollar to Benefit International Students

Fall in Australian Dollar to Benefit International Students

Six-and-a-half years of pressure from multiple global factors has led to an all-time low in the value of the Australian dollar, but the slump has proved a positive inducement for international students hoping to study in Australia.

The Australian dollar is free to waver according to the currency’s supply and demand within the foreign exchange market, otherwise known as the “forex market”.

It is a merge of the bolstering U.S dollar (since this year alone it has risen by about 14 percent), plummeting prices for commodities and lower rates of interest that has forced the commodity-linked currency to levels that have never been seen before since the start of the of the global financial crisis.

Earlier this year, Stephen Koukoulas of The Guardian noted that the escalation of Australia’s net foreign debt is majorly damaging the confidence of Australia’s foreign investors.

This year, the Reserve Bank of Australia has made moves to slash interest rates in an effort to encourage growth, but various analysts commented that “all roads lead to a weaker Australian dollar.

Devaluation of the currency certainly presents a number of downfalls for the population of the country, including the falling price of iron ore, Australia’s most profitable export, which dropped by nearly 50 percent in 2014, and hit a record-low in late January of this year after loss-making steel mills in China significantly cut their export.

Shane Oliver, chief economist at AMP Capital says that, “It took ten years to hit a high at $1.10, and the bottom was at 48 U.S cents in 2001.

“Its downside is driven by commodities, and its [bottom is] very much dependant on what commodity process do.”

Because companies are paying a lot more to import goods, petrol prices in Australia are set to increase in accordance with the crash of the dollar, causing much anger and frustration. The plummet also means that prices for shopping online are sure to get even steeper, and overseas travel will also get more expensive, resulting in many Australians opting to take their holidays closer to home.

However, the weakened Australian currency will benefit international students at universities across the country.

For many years, the rising cost of tuition, food, travel, as well as student halls of residence has added substantial stress to the decision of studying abroad, for both the student and their families. But the fall in the value of the Australian dollar means that international students can now get much more for their money.

The continued fluctuation in the value of Australian currency has somewhat relaxed the pressure faced by the country’s international student cohort, giving them the opportunity to focus entirely on their studies.

Asif Narejo, an international student at a tertiary university in Canberra, commented: “It does help me a lot, less mental health stress, in terms of financial problems and the worry about my parents providing me money.

“Plus it does improve my living standards as well, providing me more money here.”

Example of fees paid for a Bachelor of engineering at a Canberra university*

 

Example of fees paid for a Bachelor of engineering at a Canberra university*

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Despite the fact that the cost of tertiary tuition in Australia has continued to rise, the country’s international student population have experienced a considerable cutback in their fees.

For domestic Australian students studying Engineering at a university in Canberra, the annual fee has risen $3,000 from the price they paid in 2014, but a Chinese student on the same course will have experienced a decrease of 23,000 Yuan from the annual fee they paid last year.

Financial Advisor, Matthew McNamara, claims that the return investment Australia’s international students are experiencing is far better than 12 months ago.

He said: “With the decline in the Aussie dollar around 20 percent- especially about the Chinese Yuan- these guys are effectively getting cheaper deal in tuition fees.

“It’s not only that, it’s rent, it’s food, retail, hospitality so effectively they are getting more.”

The Vice Chancellor of the University of Canberra, Stephen Parker, commented that this is “probably the best time to study in Australia.

“Australia has got strong universities…world ranked. The reputation of having a degree from an Australian University travels very well.

“When they go back to their home country, I think it’s a good thing for them to have.”

The fact that many domestic Australians are taking their holidays within the country, paired with the influx of international students Australia is likely to experience, the country could potentially see a significant boost to its economy. But since the value of the dollar continues to fluctuate, the future of the Australia’s economy remains undeniably unpredictable.

Image via Shutterstock.

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