Global monetary authorities’ enduring interest in the Aussie dollar is hindering efforts by Australia’s central bank to curb the currency’s strength.
Westpac Banking Corp., the country’s secondrpt-biggest bond underwriter, said the number of central banks it interacts with has tripled to about 60 over the past three years. Central banks bought more than a quarter of the 2033 Australian Commonwealth government bonds offered in a record sale last week, the country’s funding arm said Nov. 20.
Reserve Bank of Australia Governor Glenn Stevens said Nov. 21 that the search for higher yields and the nation’s AAA status has contributed to strength in the local dollar, adding he wouldn’t “eschew” currency intervention. South Africa’s central bank this month joined peers in saying it would add the currency to its reserves. Australian bonds have handed U.S. dollar-based investors a 12.6 percent loss this year, the second-worst performance among sovereign markets tracked by European Federation of Financial Analysts Societies and Bloomberg indexes.
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