Au revoir Australian dollar safe haven?

Wednesday, 1 April 2015

The IMF has released its Commitment of Foreign Reserves (COFER) update for Q4 2014 and it registered a big fall:

The 5.2% fall was the highest among all of the currencies tracked by the IMF but is roughly equal to the fall in value. I expect central banks to remain leery given the notion that a tiny and highly volatile commodity producer with a current account deficit is “safe” is about as useful as going long RIO for yield.

This is very good news.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.