rba could already be selling $a overseas: ubs

This is an interesting article about how the RBA could be secretly printing money to keep the dollar down! I wonder whether this will backfire and turn into high inflation? Might be a good time to lock in a five year mortgage?


RBA could already be selling $A overseas: UBS

Investment bank UBS believes the Reserve Bank of Australia (RBA) could already be printing Australian dollars and selling them to foreign central banks in a bid to minimise buying pressure on the currency, The Australian Financial Review reports.

Such a move is said to be an exact adherence to suggestions made by former RBA board member Warwick McKibbin to the newspaper in August.

According to the AFR, UBS analysts Gareth Berry and Andrew Lilley have raised concerns over what they deem to be a sudden accumulation of foreign exchange on the central bank's balance sheet during the months of August and September.

The accumulation has been labelled a form of “passive intervention” and reportedly been matched by a lift in deposits of overseas institutions held at the RBA.

In the week ending October 31, $2.1 billion is reported to have been deposited, which constitutes the highest weekly inflow since May 2009, while numbers are said to have been consistently high since late August.

http://www.businessspectator.com.au/bs.nsf/Article/RBA-could-already-be-selling-A-overseas-UBS-pd20121107-ZT6RH?opendocument&src=rss