After selling close to $4 billion of NZ dollars in July, last month the RBNZ had its largest net gain of Kiwi dollars since 2015

They sold big, and then they bought - a little.

The Reserve Bank (RBNZ) has followed its sale of almost NZ$4 billion during July with a net gain of NZ dollars in August - albeit of just $84 million.

However, small as the net gain of Kiwi currency was in August, that's still the biggest net gain of NZ dollars that the RBNZ has actually conducted since 2015.

And even though the central bank did buy some Kiwi dollars in the past month, it still increased the stash of offshore cash it has available for intervening in foreign exchange markets - if it needs to.

This is according to the RBNZ's foreign currency assets and liabilities monthly figures.

Earlier this year the RBNZ indicated that it was going to put more of its assets into foreign currency.

The RBNZ announced that it and the Finance Minister Grant Robertson had agreed to a "new framework" for managing foreign reserves. As part of this, the amount held in offshore currencies would increase - but the RBNZ's not telling us by how much.

Then later in the year the New Zealand government added half a billion dollars to the Reserve Bank’s balance sheet last month and gave it an indemnity to provide fire-power to intervene in currency markets. 

Then in July came the selling of NZ$4 billion.

This is all ultimately about increasing the so-called foreign currency intervention capacity - which is essentially available foreign denominated money that the RBNZ could use to intervene in the foreign currency markets and affect the value of the Kiwi dollar, if necessary.

(There's detail in this story on the RBNZ's approach to intervening in the currency markets).

The RBNZ describes the foreign currency intervention capacity as foreign currency assets that are readily liquefiable less foreign currency liabilities that fall due in the next 12 months.

The sale of the NZ$4 billion in July increased the foreign currency intervention capacity to $16.699 billion. Previously the central bank had been maintaining an intervention capacity of around $12 billion.

And even though the RBNZ actually had a net gain in NZ dollars in August of the above mentioned $84 million, it has further increased its foreign currency intervention capacity during the month to $17.573 billion, which is a new all-time high.

But, obviously there's still no indication from the RBNZ as to whether it plans to increase the figure still further.