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RBA Sells A$117 Million of Australian Dollars to Other Clients

Dec. 20 (Bloomberg) -- The Reserve Bank of Australia decreased net sales of the nation’s dollars last month to a category of buyers that can include foreign central banks.

The RBA sold A$117 million ($123 million) more Australian currency than it bought in November through the other outright transactions category, less than the net sales of A$483 million in the previous month, according to data released today. It sold a net A$414 million in the spot foreign-exchange market, more than the A$275 million in October and bought a net A$424 million from the government.

A surge in RBA sales of the so-called Aussie dollar since August prompted speculation policy makers are seeking to curb gains in the currency after a more than 50 percent climb over the past four years hurt manufacturing and tourism. The central bank has now reported net sales of A$1.5 billion in the other outright category over the past four months.

Australia’s AAA debt rating is helping lure investors, with as many as 26 central banks including those in Brazil, Russia and Germany holding the currency, according to data compiled by the Reserve Bank and Bloomberg. The South Pacific country is one of just seven nations worldwide that have top-level AAA rankings and stable outlooks from all three major rating companies. Canada, Denmark, Norway, Sweden, Singapore and Switzerland are the others.

Foreign official investors held 29 percent of Australian federal, state and local debt at the end of 2011, the most for any single currency, according to International Monetary Fund data.

The Aussie dollar bought $1.0474 as of 12 p.m. in Sydney. It has risen 2.6 percent this year.

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

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