RBA printing for its peers?

From the AFR:

Further evidence that the Reserve Bank of Australia may be passively intervening in currency markets by selling Australian dollars off-market has been released by the central bank on Thursday morning.

The total volume of “other outright” transactions, which take place between the RBA and other central banks and overseas institutions, reached $483 million in the month of October, the highest level since June 2009.

In the last three months, inflows of $1.37 billion have been recorded in this category, compared to $360 million in the previous three months.

Here is the montly data table:

Kind of looks like it.

 

22 Responses to “ “RBA printing for its peers?”

  1. Peter Fraser says:

    The power of the Guttenberg – one can only marvel.

  2. Gunnamatta says:

    One sort of wonders what their actual gameplan is.

    ‘Leaning into’ the dollar isnt really going to materially alter the AUD. 1 Billion per querter is not going to take much sting out. I understand the signal theory but I think the markets are getting other signals (at least short term)

    • Better than not doing it.

      • Gunnamatta says:

        Yeah, yeah, I agree there.

        But what I am wondering is the following.

        If you assume they are doing direct deals with other buyers, then somewhere they will be accounting for that as policy. Why they are doing it, how long they do it for, what circumstances they are doing it in etc and then identifying what effect they are trying to achieve.

        Then following on from that you would have to assume that they have looked at other mechanisms to achieve the effect.

      • The Patrician says:

        All good questions but apart from CHF, what is the RBA buying?

      • Gunnamatta says:

        another good question….

        If you assumed they would be into NOK, CAD and other inflated commodity back currencies (maybe CLP?) you would have to wonder why they would bother (and even there I doubt there is scope to buy enough)

        Maybe take the punt on the USD and back the US economy to grow first and fastest.

        Maybe do some deal with CNY?

      • The Patrician says:

        Maybe selling AUD for AU?

  3. Ortega says:

    So now we’re joined the family of countries pumping more paper money onto the global economy?

    This is gonna end well…!

    • Ronin8317 says:

      With other reserve banks (e.g. Russia) buying the Australian currency, it makes perfect sense for the RBA to buy foreign currency in response. The net effect on the amount of money flowing into the world is zilch. It is merely an accounting entry in the account of the reserve banks.

  4. BotRot says:

    There would be no complaints if they printed directly into everyones bank account (or shifted numbers into it).

    Nothing wrong with a little printing, its’ just going in all the wrong directions.

    • Janet says:

      I kinda like the Nietzche comment as well…I just couldn’t figure out if I was the cynic or not…..

      • BotRot says:

        Thanks Janet, looking at the world around me leaves me thinking, what’s the point of being smart, full of good ideas, offering solutions or ideas that would work. Not from me personally, the smart, observant, the rationale, seemed to be the damned. In a world filling with buffoonary, and a cultural transformation looking more like a reality TV show.

        Do we bother fixing things for the better? Is it possible being on the same ship of Buffoonery as those that never really know what’s happening to them….

        At least cynicism make me smile…

        If you get a chance and you’re that way inclined, watch a movie called Idiocracy. Slap-stick Amercian comedy that will actually make you cry.

      • Jackson says:

        Can you fix me up with some Brawndo, BR?

    • dunkz says:

      The problem with a little printing is that it becomes a bit more printing, followed by substantially more printing, and ending with Zimbabwe.

      The fact that everyone’s doing it simply means we’re all just adding zeros together.

  5. Opinion8red says:

    And from the AFR links below that article -

    Farmer’s lose $43bn on Aussie dollar … “Australia’s rural sector has lost up to $43.5 billion in export income thanks to the mining boom pushing up the value of the Australian dollar, according to a report by think tank The Australia Institute.”

    *shakes head*

  6. aplund says:

    What’s wrong with the interest rate signal? Do they really think the forex market perfectly decouples from the domestic economy? As there is still room to move down in interest rates, if they wanted to affect the exchange rate you’d think that’d be the preferred method; but it looks like they take this rhetoric of a 3% cash rate as the lower limit very seriously, even though lending rates bank customers see are at least 1% higher than historically. So one could argue the comparison with the historical average is that the current cash rate is efficiently 4.25%, or about average.

  7. Neznam says:

    Looks like the RBA is on target to deliver a record dividend to Treasury.

  8. MsSolarFelineAU says:

    RBA should be buying au & ag. You know, so we have “sound money”. Oh, nevermind.

    • Counterfiat says:

      Wouldn’t that make our balance of payments ‘look’ bad. You know exporting all that shiny for binary digits, ‘good’ right.
      What colour lipstick was it that made sowgirl pig pretty? Journalism.

      What do you get when a swan brings bacon home for dinner dressed in journalism? Roasted Bacon Avarian flu, as in RBAflu.

  9. Capitalist says:

    You can keep ignoring Lowe’s comments a few weeks ago explicitly stating the AUD is not “fundamentally overvalued”.

    The RBA doesn’t have the fire power to meaningfully influence the AUD without printing billions of AUD.