Weaker franc helps Swiss National Bank’s forex reserves rise By Reuters
Economy 10 minutes ago (Nov 07, 2022 09:40)
© Reuters. FILE PHOTO: The building of the Swiss National Bank (SNB) is pictured in Bern, Switzerland June 16, 2022. REUTERS/Arnd Wiegmann
ZURICH(Reuters) – The Swiss National Bank’s foreign exchange reserves rose in October, central bank data showed on Monday, as the Swiss franc’s depreciation helped reverse a sharp drop in September.
The SNB held 817.16 billion Swiss francs ($821.27 billion) in foreign currencies at the end of October, compared with 806.11 billion francs in September, revised from an originally reported 807.13 billion francs.
The SNB declined to comment on the change.
Market participants have been watching the data for possible indications that the central bank is selling some of its dollars and euros to keep a lid on inflation by supporting the Swiss franc’s appreciation this year.
The cheaper franc could mean that reserves rose despite a possible intervention in the currency market.
“It’s quite possible that the SNB has been selling some of its foreign currencies to strengthen the Swiss franc,” said Credit Suisse (SIX:CSGN) economist Maxime Botteron, who estimates the SNB had sold 3.4 billion francs of foreign currencies in September.
“Having a strong franc is a useful tool against inflation, and combating inflation is the SNB’s number 1 task,” Botteron said before the data was published.
Imported prices contributed around 1.7 percentage points to the Swiss inflation rate of 3% in October, while 1.3 percentage points came from domestic price rises.
UBS economist Alessandro Bee, however, said it was hard to read the forex reserves data because it mixed two effects – the SNB buying or selling FX reserves and valuation effects.
Every month the value of the SNB’s reserves is adjusted to reflect currency translation effects, and every quarter they are also recalibrated to reflect the market value of the stocks and bonds the central bank has bought.
“I don’t think the SNB is selling FX reserves in a huge amount to underpin the Swiss franc,” Bee said. “FX interventions on both sides seems to me an instrument they only deploy when they are really concerned about the economy or the inflation.”
($1 = 0.9950 Swiss francs)
Weaker franc helps Swiss National Bank’s forex reserves rise
LONDON (Reuters) -Britain’s foreign minister James Cleverly on Monday will announce investments of more than 100 million pounds ($115 million) to support developing countries in…
LONDON (Reuters) -Improving transparency of ‘non-banks’ such as pension funds is a first step in applying lessons from recent turmoil in Britain’s government bond market, Bank of…
By Ben Blanchard and Jaiveer Shekhawat TAIPEI (Reuters) – Apple Inc (NASDAQ:AAPL) expects lower shipments of premium iPhone 14 models than previously anticipated following a…
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.