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Australia belongs to that exclusive club of countries with a AAA rating and its currency has been resilient, despite worries about slowing growth in its biggest trading partner, China. Now global central banks are stepping up their purchases of the Aussie dollar.
That's raising the question whether the Aussie, once one of the most volatile risk currencies, is changing colors into more of a safe haven.
Russia’s central bank has become the latest to consider wading into the nation’s assets. The country will allocate A$5 billion ($5.025 billion), or 1 percent of its foreign currency reserves, to Australian-dollar assets such as government bonds, according to a report by Dow Jones Newswires on Monday.
This follows media reports earlier this month that Germany's Bundesbank was exploring adding Australian dollar assets such as bonds, as it stepped up meetings with Australian banks to discuss its foreign-exchange strategy.
“The Aussie looks far less ugly than most other major currencies and is increasingly serving as a safe haven,” Mitul Kotecha, head of global foreign-exchange strategy at Credit Agricole in Hong Kong, told CNBC. “But I don’t think the Aussie is a safe haven in the traditional sense in the way that the Japanese yenand Swiss franc are, as Australia continues to sustain a sizeable current account deficit.”
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