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14 Mar 2013
Forex Flash: AUD & CAD tied to Central bank FX reserve diversification flows - Scotiabank
Camilla Sutton and Eric Theoret, FX strategists at Scotiabank note that a key component of their forecast for medium term strength in CAD and AUD pertains to the supportive impact of central bank reserve diversification flows.
They note that it has been widely reported that the IMF may soon begin publishing foreign central bank holdings of CAD and AUD alongside the traditional reserve currencies which include USD, EUR, GBP, JPY and CHF reserves. They write, “Currently, the IMF’s quarterly COFER (currency composition of official foreign exchange reserves) data include CAD and AUD in the ‘other’ category. An IMF working paper from December 2012 detailed a dataset that categorized investors in government debt including a category specifically labeled ‘foreign official’ (central bank investors). The data suggest that foreign central banks hold US$154bn in CAD-denominated debt and US$156bn in AUD-denominated debt, below the GBP and JPY allocations seen in the COFER data, but well above CHF. E.T.”
They note that it has been widely reported that the IMF may soon begin publishing foreign central bank holdings of CAD and AUD alongside the traditional reserve currencies which include USD, EUR, GBP, JPY and CHF reserves. They write, “Currently, the IMF’s quarterly COFER (currency composition of official foreign exchange reserves) data include CAD and AUD in the ‘other’ category. An IMF working paper from December 2012 detailed a dataset that categorized investors in government debt including a category specifically labeled ‘foreign official’ (central bank investors). The data suggest that foreign central banks hold US$154bn in CAD-denominated debt and US$156bn in AUD-denominated debt, below the GBP and JPY allocations seen in the COFER data, but well above CHF. E.T.”