RBA Sells A$483 Million to Other Clients, Most Since 2009

The Reserve Bank of Australia increased net sales of the nation’s dollars last month to a category of buyers that can include foreign central banks.

The RBA sold A$483 million ($500 million) more Australian currency than it bought in October through so-called other outright transactions, the most since June 2009, according to data released today. It sold a net A$275 million in the spot foreign exchange market and bought a net A$301 million from the government. Its foreign-exchange reserves rose to A$38.5 billion from A$34 billion in September, the data show.

A surge in RBA sales of the Aussie dollar since August prompted speculation policy makers are seeking to curb gains in the currency after its 60 percent climb over the past four years hurt manufacturing and tourism. The central bank has reported net sales of A$1.4 billion in the other outright category over the past three months, the most since the period ended July 2009.

“There will likely be more chatter that the RBA is perhaps conducting off-market, central bank-to-central bank transactions,” said Emma Lawson, a Sydney-based currency strategist at National Australia Bank Ltd. “The Aussie is considered to have been strong due to these market transactions for investors buying our government debt. If it’s being conducted off-market, then perhaps that takes some pressure off the upside for the currency.”

Bonds Bought

Foreign investors including at least 17 central banks have been snapping up Australian government securities, the highest- yielding AAA rated sovereign notes. Overseas buyers held 77.5 percent of the nation’s bonds as of June 30, compared with a record 79 percent on March 31, government data show.

The Aussie bought $1.0359 as of 12:29 p.m. in Sydney. It has risen 1.8 percent in the past 12 months, the biggest gainer after the New Zealand dollar among Group of 10 currencies.

Australia’s 10-year yield lost three basis points to 3.03 percent. The nation’s government debt has handed investors 10 percent return in the past year after accounting for gains in the currency, according to data compiled by Bloomberg and the European Federation of Financial Analysts Societies. They are the best-performers among developed markets that hold a AAA score from all three main credit-rating companies, the data show.

Other outright foreign-exchange transactions include the RBA’s dealings with “other central banks, international financial institutions which aren’t intended to affect the exchange rate, clients other than the Australian government, and interest received on holdings of foreign assets,” according to the central bank’s website.

To contact the reporter on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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