The Zurich-based central bank’s holdings stood at 437.7 billion Swiss francs ($486 billion) last month, compared with 435.2 billion francs in December, data on its website showed today. Economists had expected them to remain steady at 435.8 billion francs, according to the median of five estimates.
The SNB has amassed record foreign-exchange reserves through currency-market interventions to defend the cap of 1.20 per euro it set on the franc in September 2011. It cited the risk of deflation and a recession when it implemented the ceiling. For the SNB to abandon the cap, inflation would have to rise “significantly,” its Vice President Jean-Pierre Danthine said earlier this month. The central bank expects consumer prices to rise 0.2 percent this year.
According to Bloomberg News’s monthly survey, the SNB will keep the cap in place through the end of the year.
The central bank hasn’t intervened in currency markets since September 2012, its policy makers have said. The holdings, calculated according to International Monetary Fund standards at the beginning of each month, hit an all-time high of 444 billion francs in May last year.
The franc is popular among investors as a haven at times of heightened market stress. Their anxiety about the euro area’s debt crisis prompted the franc to nearly reach parity with the euro in August 2011. Last month, the Swiss currency gained 0.2 percent against the euro and lost nearly 2 percent against the dollar.
The SNB expects a 9 billion-franc loss for 2013, with a 3 billion-franc gain on its foreign-currency positions for the year failing to compensate for a 15 billion-franc valuation loss on its gold holdings. Because of this, the central bank will not make its customary payment to the government and cantons.
As of the end of December, the SNB held 48 percent of its foreign-currency reserves in euros and 27 percent in dollars. Of that, 16 percent were held in equities and the remainder in highly rated sovereign bonds.
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