The Reserve Bank of Australia said the country’s currency is held by as many as 34 central banks from Reykjavik to Santiago, and models suggested the Aussie dollar was as much as 15 percent overvalued, documents showed.
The central banks of Poland, Chile, Sweden, Macedonia and Iceland are among 16 economies that publicly hold the Australian currency, according to papers released today under a Freedom of Information Act request by Bloomberg News. Among 18 possible holders are South Korea, South Africa, France, Germany, Singapore and Malaysia. It said 21 central banks, including the Federal Reserve, European Central Bank, Bank of Japan (8301), Bank of England and Bank of Canada, don’t hold it.
“Most models — including the staff’s internal models and the IMF’s models suggest the exchange rate is overvalued by 4-15 percent,” a document for the RBA’s September board meeting showed. The Australian dollar, at $1.0224 at 9:55 a.m. in Sydney today, traded between $1.0167 and $1.0625 in September.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.