Russian Central Bank buying up AUD, ditching USD..

Blockhead · Jun 20, 2011

http://www.theaustralian.com.au/bus...-1pc-of-reserves/story-e6frg8zx-1226078107256

The Orstrayan said:

THE Russian Central Bank will pour up to $US5 billion ($4.7bn) into the Australian dollar in a fresh wave of support for the currency, in a move to diversify its reserves and shift away from the US dollar.

"We are seeing a lot of interest in the Australian dollar from central banks in Asia and from large fund managers," HSBC chief economist Paul Bloxham said.

"They are looking for an alternative to the US dollar and the Australian dollar looks like a good candidate.

"They are looking to move away from US assets, given concerns about what is happening in the US economy, particularly its fiscal position.

"A small movement in global sentiment can mean quite a large shift in a small currency like Australia's."
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Ouch · Jun 20, 2011

Our little Aussie battler is finally grown up. Future Fund chairman David Murray in quoted article:

"If you hold the Australian dollar, you can be confident that inflation will remain reasonably controlled and real interest rates are high, which means you are going to get a good return."

Mr Murray said the dollar was also seen as a proxy for the emerging Asian nations, including China. "If you can't buy (the Chinese currency), you can buy the Australian dollar. This is one factor putting some upward pressure on the Australian dollar."
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hiho · Jun 20, 2011

Question (leading) why do central banks advertise inflation targets? (Hint....Think Petrol Stations price boards)

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Russian Central Bank buying up AUD, ditching USD..

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