RBA sells dollars to stem  the  Fast rise of the australian dollar rally

The Reserve Bank of Australia sold $1.4 billion of its own currency in May, the biggest net sale since February 2004, as the Australian dollar rose by a record amount that month.

Australia’s currency advanced 10.4 per cent in May, the biggest monthly gain since it was freely floated in 1983. The so-called Aussie traded at 79.67 US cents in Sydney, up from 70.26 US cents at the end of last year. Foreign exchange trading has been  on the rise

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"The bank had taken the opportunity to replenish its reserves, which were used when it entered the market to provide liquidity," late in 2008, a spokesman for the RBA said in a telephone interview.

The central bank bought $3.15 billion of its own currency in October, the biggest net purchase on record, as the Australian dollar slumped to the lowest level since 2003 following the bankruptcy of Lehman Brothers Holdings the previous month.

"The RBA approach is not to force the market in a particular direction," said Ashley Davies, a currency strategist in Singapore at UBS AG, the world’s second-biggest foreign-exchange trader.

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