Forex Flash: RBA intervention chatter is “noise and misleading” - TDS
FXstreet.com (Barcelona) - There's been plenty of talk about a possible RBA intervention in the markets in order to prevent the Aussie from rising further, or even lowering it, but according to TDS Securities Singapore based analyst Alvin Pontoh, this is pure "noise and potentially misleading," in his view, Alvin says.
"For those who claim the RBA is intervening," Alvin explains, "the case is based on two issues (1) the AUD3bn accumulation of FX reserves since August, and (2) the jump in RBA purchases of foreign currency through 'other outright' channels, which includes transactions with other central banks."
"Neither is remotely convincing to us. The magnitude of the RBA's reserve increase is far from unusual, given that the average movement of the series since 1995 is AUD830mn per month (in absolute value terms). The RBA's net foreign exchange reserves have essentially remained unchanged for the past two years, never falling below AUD41bn nor rising above AUD45bn."
"For those who claim the RBA is intervening," Alvin explains, "the case is based on two issues (1) the AUD3bn accumulation of FX reserves since August, and (2) the jump in RBA purchases of foreign currency through 'other outright' channels, which includes transactions with other central banks."
"Neither is remotely convincing to us. The magnitude of the RBA's reserve increase is far from unusual, given that the average movement of the series since 1995 is AUD830mn per month (in absolute value terms). The RBA's net foreign exchange reserves have essentially remained unchanged for the past two years, never falling below AUD41bn nor rising above AUD45bn."
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