The real reason the Reserve Bank of Australia needs a truckload of taxpayer's money is not to avoid going broke, but to ensure it makes a good impression.
That was the message from the RBA's governor as he fronted a parliamentary committee on Wednesday.
The soaring Australian dollar has reduced the value of Australia's foreign exchange reserves held by the RBA, creating losses that had depleted the Reserve Bank Reserve Fund.
In October, Treasurer Joe Hockey announced the government would grant the central bank $8.8 billion to beef up the fund.
But the necessity to keep a reserve fund in the black, and so far into the black, is not at all obvious for a central bank.
A positive capital position is a must for a normal business, yes, but there's something very special about central banks: they get to print their own money so running out of cash is not an issue.
RBA governor Glenn Stevens acknowledged that, telling the committee that "the notion of insolvency for a central bank is an odd one".
"It's not like a listed company."
Even so, he believes the RBA should hold enough reserves to cover any losses and avoid having a negative capital position.
He gave his reasoning for that when asked what the RBA would do if its reserves were depleted.
"The scenario you paint, in which the cupboard is so-called bare - that is one that we gave thought to, because not too many more cents on the exchange rate at one point and the Reserve Bank Reserve Fund would indeed have been a negative number," he said.
But the RBA's advice from accounting professionals and auditors was that "the Bank carries on in that world".
There were central banks which operated with negative capital, he said.
"But I don't think it's a good look.
"I think in that world there is the risk of uninformed commentary suggesting, you know, the RBA's broke or something.
"It wouldn't be true, but it wouldn't be helpful in sustaining the credibility of our institution."
It was still possible that the RBRF could go into the red if the exchange rate suddenly surged before the grant came through, he said.
But RBA officials could still come to work every day and do their job.
"The institution doesn't get wound up or something, but I'm concerned about the perception that might be created, that's why I think that balance ought to be always positive and a strong number," Mr Stevens said.
