When it comes to the Australian Dollar, the US Dollar and other currencies, the rise of the Australian and US Dollar has been accompanied by a rise in the price in the Australian dollars, according to a report by Australian economists.
The latest data from the Australian Bureau of Statistics (ABS) shows the Australian Government’s Reserve Bank’s (RBA) monthly cash balance increased by 1.2 per cent from the previous month, to $US12.7 billion.
That is up 4.7 per cent on the previous quarter, and is the second straight month the RBA has seen an increase in its cash balances.
But there is another reason for the rise in cash balances, and that is the rise on the US dollar.
According to ABS data, the Australian currency has gained 1.6 per cent against the US.
But that has been offset by a decline in the value of the AUD.
The Australian dollar rose 0.9 per cent in value to $NZ1.1075 in the 12-month period ending December 31, up 1.7 points.
This is up 0.4 per cent compared to the previous 12-months.
The rise in AUD, however, has not been offsetting the loss of value from the rise, according the ABS data.
“The RBA’s cash balance is driven by both the US and Australian dollar movements,” the ABS said.
It is understood the RIB has taken actions including reducing the value, for example, of the US$5 note to prevent it from becoming worthless. “
While the RBC’s cash balances are affected mainly by these factors, the RBB has also taken actions to mitigate the risk that US and Australia dollar movements could lead to a US and AUD trading at substantially different prices.”
It is understood the RIB has taken actions including reducing the value, for example, of the US$5 note to prevent it from becoming worthless.
“US dollar movements are particularly important for Australian households, and the RSB’s ability to manage this change is critical to the stability of the exchange rate,” the economists said.
The Federal Government has said it expects the Australian economy to continue to grow, and a rebound in the AUD could boost GDP by $1.2 billion.
The ABC’s Andrew Bowen reports.