Bloomberg
SNB Says Foreign-Currency Holdings Declined in August
By Klaus Wille
(Updates with strategist’s quote in fourth paragraph.)
Sept. 6 (Bloomberg) -- The Swiss central bank said its holdings of foreign currencies declined in August after the Swiss franc appreciated to a record against the euro.
Holdings fell to 218.1 billion Swiss francs ($214.4 billion) from 219.5 billion francs in July, the Swiss National Bank said in a statement on its website today. Reserves slipped for a third month in August partly as a stronger franc eroded the value of other currencies on the bank’s balance sheet.
The SNB indicated in June that it won’t counter franc gains anymore after quadrupling holdings of foreign currencies over the previous 15 months to fight deflation threats. The franc has since appreciated almost 6 percent against the euro, pushing down costs of imported goods and hurting exports.
“The SNB likely hasn’t intervened since June and the decline in the reserves seems to be due to the franc’s gains versus the euro and the dollar,” said Marcus Hettinger, a currency strategist at Credit Suisse Group AG in Zurich. “It’s part of their efforts to normalize monetary policy.”
The franc depreciated against the euro after the report, trading as low as 1.3134. The Swiss currency was at 1.3070 at 12:10 p.m. in Zurich, up from 1.3109 on Sept. 3. The franc reached a record 1.2852 against the euro on Aug. 31.
The SNB led by Philipp Hildebrand will hold its next rate assessment on Sept. 16.