SNB for­eign cur­rency re­serves hit record as franc dipped

The Pak Banker - - COMPANIES/BOSS -

The Swiss Na­tional Bank's for­eign-cur­rency re­serves rose to record in July, a month when the franc weak­ened against both the dol­lar and the euro. The re­serves in­creased 3 per­cent to 531.8 bil­lion francs ($542 bil­lion) from 516 bil­lion in June, ac­cord­ing to data pub­lished on the cen­tral bank's web­site on Fri­day. SNB Spokesman Wal­ter Meier de­clined to com­ment on the data. The cen­tral bank's for­eign-cur­rency re­serves mush­roomed due to in­ter­ven­tions it waged to de­fend its cap on the franc, set in 2011. De­spite hav­ing abol­ished the ceil­ing in Jan­uary, SNB pol­icy mak­ers have said re­peat­edly they're ready to in­ter­vene if needed to en­sure mon­e­tary con­di­tions re­main ad­e­quate, with SNB Pres­i­dent Thomas Jor­dan on June 29 un­char­ac­ter­is­ti­cally ad­mit­ting to in­ter­ven­tions to "sta­bi­lize" the franc amid Greece's debt cri­sis. "The fact that the franc has weak­ened, I think it's the main driver for the gain in re­serves," said Alessan­dro Bee, strate­gist at Bank J Safra Sarasin Ltd in Zurich. "I can't imag­ine that there were big in­ter­ven­tions, since the franc was weaker to­ward the end of the month." Dur­ing the month of July, the franc, which in­vestors tend to buy at times of height­ened mar­ket stress, de­pre­ci­ated 1.8 per­cent against the euro and 3.2 per­cent against the dol­lar, ac­cord­ing to data. Those two cur­ren­cies made up al­most three quar­ters of its re­serves at the end of the sec­ond quar­ter.

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