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• Forex Flash: RBA reducing upward pressure on AUD – ANZ
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• RBA 0% Rate It

FXstreet.com (Barcelona) - In August and September, the Reserve Bank of Australia ( RBA ) accumulated around AUD 863 million in foreign exchange reserves. In the course of its operations, the RBA accumulates foreign currency on its balance sheet that is unrelated to the management of its reserve assets.

According to FX Strategist Andrew Salter at ANZ, "Usually this foreign currency is exchanged back into Australian dollars in the market. Data released in its monthly statistical tables suggests that for the past two months the Bank has continued to accrue this foreign currency, but that it has elected to not convert it back into Australian dollars in the market."

The RBA is thereby reducing upward pressure on the Australian dollar exchange rate through this action. Moreover, "This policy decision sends a clear signal of an evolution in the Bank's views on the currency and its inclination to act on this view." Salter notes.

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