Reserve bank of australia – foreign exchange transactions and holdings of official reserve assets [A4]

A4 RESERVE BANK OF AUSTRALIA – FOREIGN EXCHANGE TRANSACTIONS AND HOLDINGS OF OFFICIAL RESERVE ASSETS

Figures for ‘RBA FX transactions’, ‘FX transactions’, ‘Valuation effects’ and ‘Movement in official reserve assets’ refer to period totals. All other figures are end period values.

‘RBA FX transactions’, ‘FX transactions’, sales (-) and purchases (+), are reported according to the date on which settlement takes place (‘value date’).

‘RBA FX transactions (Market)’ are foreign exchange transactions against the Australian dollar (excluding foreign exchange swaps) undertaken by the RBA with foreign exchange dealers in Australia or overseas.

‘RBA FX transactions (Government)’ are the RBA’s foreign exchange transactions with the Australian Government.

‘FX transactions (Other)’ include the RBA’s foreign exchange transactions with other central banks, international financial institutions and clients other than the Australian Government, interest received on holdings of foreign assets, and transactions between the Australian Government and the International Monetary Fund (IMF). From January 2015 onwards, ‘FX transactions (Other)’ also include changes in Australia's official reserves assets owing to gold loan, gold swap and repurchase agreement transactions.

‘RBA FX transactions (Swap)’ are RBA foreign exchange swap transactions that settled during the period, excluding swaps conducted with central banks. For the period January 1995 until February 1996 ‘FX transactions (Other)’ includes ‘RBA FX transactions (Swap)’.

‘Official reserve assets (Total)’ comprise holdings of ‘Official reserve assets (FX)’, ‘Official reserve assets (Gold)’ and ‘Official reserve assets (Other)’. ‘Official reserve assets (Other)’ comprises Special Drawing Rights and the Reserve position in the IMF. From January 2015, ‘Official reserve assets (Other)’ also includes the market value of derivatives with non-resident entities, holdings in the Asian Bond Fund and loans to the IMF's Poverty Reduction and Growth Trust (PRGT); prior to January 2015, holdings in the Asian Bond Fund and the market value of derivatives with non resident entities are included in ‘Official reserve assets (FX)’. From October 2022, ‘Official reserve assets (Other)’ also includes holdings in the deposit and loan accounts of the IMF’s Resilience and Sustainability Trust (RST). Prior to June 2009, ‘Official reserve assets (Other)’ also include the market value of swap transactions conducted with the Federal Reserve as part of the US dollar Swap Facility.

‘Other foreign currency assets’ reflect holdings of foreign assets held by Australia's authorities that do not meet the criteria of official reserve assets as outlined by the IMF. These include foreign currency claims on domestic resident entities and foreign currency borrowed under the RBA's bilateral local currency swap agreements with other central banks.From October 2022, ‘Other foreign currency assets’ also includes holdings in the reserve account of the IMF’s Resilience and Sustainability Trust (RST). Prior to January 2015, 'Net forward foreign currency commitments' include 'Other foreign currency assets'.

‘Net forward foreign currency commitments’ reflect notional values of unsettled spot and forward foreign exchange transactions vis-á-vis the Australian dollar as well as future maturities of the RBA's outstanding gold loans, gold swaps, repurchase agreements and transactions under the RBA's bilateral local currency swap agreements with other central banks. Prior to January 2015, ‘Net forward foreign currency commitments’ exclude future maturities of the RBA's outstanding gold loans and repurchase agreements. ‘Net forward foreign currency commitments: Short-Term’ is defined as the ‘Net forward foreign currency commitments’ that mature within 12 months.

The sum of ‘Official reserve assets (Gold)’ and ‘Official reserve assets (FX)’ may differ from figures reported on the RBA's balance sheet in the weekly Reserve Bank of Australia Balance Sheet and in the RBA’s Annual Report. From 1 July 1996, foreign currency securities sold and cash lent under repurchase agreements are retained for accounting purposes as foreign currency investments in the RBA’s balance sheet, along with the cash received under repurchase agreements, in accordance with standard accounting treatment. Gold lent under gold loan and gold swap transactions is also retained in the RBA's balance sheet. Securities received under repurchase agreements and gold received under gold swaps are excluded from the RBA's balance sheet. For the purpose of reporting foreign exchange reserves in this table, securities sold, securities received and cash lent under repurchase agreements are excluded from official reserve assets along with gold lent under gold loan and gold lent or received under gold swap transactions. Cash received under repurchase agreements and gold swaps is included in official reserve assets. Prior to January 2015, cash lent and securities sold under repurchase agreements and gold lent under gold loan transactions are included in official reserve assets while cash and securities received under repurchase agreements are excluded. Holdings in the Asian Bond Fund and the market value of derivatives with non-resident entities are included in Official reserve assets (Other) from January 2015 and ‘Official reserve assets (FX) prior to January 2015’. These items, however, are included under Gold and Foreign Exchange for reporting on RBA’s balance sheet. From 20 December 2006, purchases and sales of foreign currency securities are reported for accounting purposes according to the date on which they are contracted (‘trade date’). For the purpose of reporting foreign exchange reserves in this table, however, foreign currency securities transactions are reported according to the date on which settlement takes place (‘value date’).

For information on changes to the RBA's methodology for compiling Australia's foreign reserve holdings from January 2015, please see 'Reporting Australia's Foreign Reserve Holdings' available at <https://www.rba.gov.au/publications/bulletin/2017/dec/pdf/bu-1217-1-reporting-australias-foreign-reserve-holdings.pdf>.