From the AFR:
The Russian central bank is increasing its Australian-dollar purchases by at least $20 billion and could be seeking to allocate up to 10 per cent of its reserves, making it harder for the Reserve Bank to push down the currency.
A source familiar with the Bank of Russia said it had already achieved a desired 1 per cent holding of its foreign exchange reserves in dollars and began buying late last year. Members of the BoR board declared their intention to buy that amount in 2011.
The decision has been made, reportedly, to go beyond 1 per cent and the bank is targeting a holding between 5 per cent and 10 per cent of reserves. Australian Commonwealth government bonds are being bought in small tranches; semi-government bonds are as yet excluded.
Russia’s foreign exchange reserves total $US522.2 billion. Each percentage point of the reserves translates into more than $US5 billion of Australian dollars.
While the LNG sector is howling like a banshee over a loss of competitiveness and the supposed pipeline of projects evaporates before our eyes, another huge gas-producing autocracy is busy piling up Australian dollar reserves. You couldn’t make this stuff up.
