The Reserve Bank of Australia, grappling with a stubbornly high currency, said an IMF plan to give the Australian dollar a higher profile in central banks' reserves data did not signal any potentially greater role as a reserve currency.
The IMF is considering adding the Australian and Canadian dollars next year to a list of separately identified currencies in its database on the currency composition of official foreign exchange reserves (COFER).
Analysts said the designation could in the long term cement the Australian dollar's position further among reserve currencies, while near-term implications were seen limited since many central banks in the Asia-Pacific region already hold the currency.
But any resultant increased demand that would further lift the currency's value would be a worry for the central bank, as it would hurt exports in the non-resource sectors just as a mining investment boom looks set to peak in 2013 or 2014.
Currently, participating central banks report their holdings of both commodity-oriented currencies under the "other" category, while the U.S. dollar, euro, yen, sterling and Swiss franc are individually listed.
RBA Governor Glenn Stevens said there was not much significance in the plan, calling it a "classification change" and nothing more.
"That actually isn't any sort of particular endorsement that makes us more of a reserve currency than we were," he told a dinner late on Tuesday in Melbourne.
"We've in fact been a small reserve currency for quite a few countries for probably 25 years," he said, adding that most Asian central banks have held substantial holdings of the local dollar for a while.
Stevens said no one knows exactly how much in Australian dollars the region's central banks hold, but the IMF reclassification could shed light on that.
Aussie in demand
The Australian dollar, or Aussie, has been highly sought after following the global financial crisis, given the country's top-notch credit ratings and relatively higher interest rates.
The resource-rich economy is also the envy of the developed world, having escaped the worst of the global financial turmoil and boasting annual growth of 3 percent or more.
Solid foreign demand helped to explain why the Aussie has held up so well over the past two years despite a savage drop in the prices of some of the country's top exports such as iron ore.
The IMF plan confirms the importance of both the Australian and Canadian dollars to reserve managers and asset allocators globally, said Sean Keane at Triple T Consulting.
"The IMF's acknowledgement of this may encourage those who have not yet diversified their reserves more widely to consider doing so," said Keane, who works on behalf of Credit Suisse.
"No matter how insignificant the direct impact of this change is, it will be read by investors as a signal of strength in both currencies, and in those two economies."
The move by the IMF is part of a wider review to provide more transparency in global financial data. It is also a reflection of a growing trend by central banks around the world to diversify their holdings beyond the U.S. dollar, the euro and the yen.
But global investors have already been scrambling to buy the Aussie dollar, noted Gavin Stacey, strategist at Barclays Capital, said. "(This) may not give the currency much more upside than would otherwise be the case," he said.
The Australian dollar has been largely trading within a $US1.0150 to $US1.0450 range over the past few months. Last year, it peaked around $US1.1080, the highest since it was floated in late 1983.
On a trade-weighted basis, the Aussie dollar is at 77.1 against a basket of currencies, not far from its historic high near 79.0.
RBA data revealed it has been accumulating foreign currencies in the last three months at a much faster pace than at any time during the past three years, raising suspicion that it was trying to ease upward pressure on the Aussie via direct sales to foreign central banks that wanted to increase reserves of the currency.
But Stevens on Tuesday dismissed suggestions the bank intended any "stealth intervention" in the currency markets, saying: "That was customer business that we decided to keep on the balance sheet because the prices seem attractive to do that at this time."