A couple of days ago the Reserve Bank of Australia (RBA) stole the spotlight from the U.S. fiscal cliff and the EZ debt drama when it released its FX currency reserves report.

According to the report, the RBA had accumulated 1.28 billion AUD worth of foreign exchange reserves in the three months to October, which is a huge leap from the 209 million AUD figure in the previous three months. The central bank had also sold 275 million Aussies to the forex market in October.

What got the market geeks' attention though, was that the RBA's "other monetary transactions" resulted in the central bank selling 483 million AUD more than it bought in October, the most since June 2009.

Since the category includes transactions with other central banks, the information fueled speculations that the RBA is using passive intervention to weaken its currency.

Remember that the strong Aussie has been one of the major factors in the RBA's recent interest rate decisions. With the euro zone debt troubles highlighting Australia's AAA credit rating and relatively stable economy, the high-yielding Aussie became one of the top dogs in the FX arena. Unfortunately, a strong currency also spells trouble for Australia's economy as it largely depends on its exports.

Early this month rumors of the RBA doing its own version of QE circulated in the markets. Some say that the RBA is quietly printing money and selling it through "other monetary transactions" to meet the other central banks' demand for the Aussie without increasing its value in the spot market.

What does this mean for the Aussie?

If the RBA is indeed printing more money, then it must be more serious about defending its currency. Consequently, this could mean that we won't see significant Aussie appreciation anytime soon. In fact, last week AUD/USD has already failed to break its former highs despite the release of positive reports from Australia.

This is why you might want to think twice about your long Aussie positions. At the very least, you should think about buying currencies other than the Aussie. Of course, We still don't have proof as the RBA hasn't confirmed nor denied the rumors.

Who knows? Maybe the RBA is simply waiting for more information before it addresses the recent changes in its foreign currency reserves. While we wait for the RBA's statement though, we should keep our eyes peeled for more economic reports that could give hints on the central bank's activities.