Germany’s central bank mulls adding Australian dollar assets
14 Jun 2012
In a move that could prove a dramatic step in Australia's emergence as a safe haven for investors rattled by the European debt crisis, Germany's central bank, Bundesbank, is said to be considering adding Australian dollar assets such as bonds to its foreign currency holdings, according to The Australian.
Bundesbank officials have reportedly held meetings with major Australian banks and the Reserve Bank of Australia (RBA) recently having discussed the potential change in foreign currency strategy.
Talks got under way as far back as 2010, when the RBA prepared a briefing document for the Bundesbank which detailed the nature of Australia's debt markets and the economy, according to The Australian.
The Bundesbank's current foreign currency reserves are mostly held in US and Japanese government bonds, with US dollar assets making up 93.1 per cent of its €29.433 billion in foreign currency reserves.
In the instability of the European debt crisis, central banks are increasingly turning to the Australian dollar for stability and Russia's central bank too has recently added Australian dollar assets to its portfolio.
