'Boom with gloom' - RBA's balancing act External 'financial factors' are driving up currencies, Guy Debelle says. The US Federal Reserve's pursuit of an "extremely expansionary monetary policy, which may be completely justifiable from the US's perspective," can create problems for smaller economies, says Guy Debelle, assistant governor for financial markets at the Reserve Bank. "Even if the global portfolio reallocation is small from the US perspective, it can be very large from the point of view of a small open economy," he said overnight at an International Monetary Fund conference in Washington. Some have said that isn't a stronger US just good for the rest of the world? And just, basically, suck it up, sunshine. Mr Debelle also called Australia's recent economic experience a "boom with gloom." "Domestic investors in Australia are being completely depressed throughout this whole period," he said. So we've had this interesting balancing act of telling foreigners, actually, things aren't quite so good at the same time as trying to tell our domestic citizens, actually, they're a helluva lot better than they think they are. The Australian dollar's appreciation hasn't tracked economic fundamentals, Mr Debelle noted, echoing similar comments made by RBA chief Glenn Stevens last week. "In Australia's case, the issue is exchange-rate appreciation is not in line with fundamentals," Mr Debelle. A persistent period of such misalignment can cause Dutch Disease, Mr Debelle said, referring to the Netherlands's experience of a surge in growth in its energy industry that drove up the currency and hurt manufacturing. Mr Debelle was a discussant at an IMF conference recognising the economic contributions of former Bank of Israel Governor Stanley Fischer. The panel on which he spoke reviewed a paper on capital controls and exchange rates. Australia's dollar was the best performing Group of 10 currency last month, hurting export-related industries. But the currency fell overnight, as the greenback strengthened on the back of better than expected US GDP data and a surprise rate cut by the European Central Bank. The dollar bought 94.53 US cents this morning, compared with 95.55 cents yesterday. The RBA left its benchmark rate unchanged at 2.5 per cent earlier this week as governor Glenn Stevens intensified his language on the exchange rate, warning the currency was "uncomfortably high" and a lower level would be needed to achieve balanced growth. In a statement after the decision, Mr Stevens said growth that's "a bit below trend" and a rising unemployment rate are "likely to persist in the near term" as the country adjusts to less mining investment.