The Swiss central bank’s currency holdings rose to a record last month after policy makers imposed a franc cap to help exporters and fight deflation threats.
The reserves, calculated according to standards by the International Monetary Fund, jumped to 282.4 billion francs ($305 billion) at the end of September from 253.4 billion francs in the previous month, the Zurich-based Swiss National Bank said on its website today.
SNB President Philipp Hildebrand has pledged to defend the franc ceiling of 1.20 versus the euro with the “utmost determination” by purchasing “unlimited quantities” of currencies if needed. Alexander Koch, an economist at UniCredit SpA in Munich, said any worsening of the euro-region’s debt crisis would force policy makers into “massive purchases.”
“The latest increase in foreign-currency reserves does not imply that the SNB had to purchase euros to a large extent,” Koch said in an e-mailed note today. “It cannot, however, be ruled out that the market will still test the minimum exchange rate in the coming weeks and months.”
The franc depreciated after the report, trading at 1.2375 versus the euro at 9:45 a.m. in Frankfurt, down 0.4 percent on the day. It was at 92.77 centimes versus the dollar.
Switzerland’s currency, considered a haven in times of turmoil, appreciated to a record 1.00749 against the euro on Aug. 9 amid speculation euro-area governments would be unable to contain the debt crisis. The franc hasn’t strengthened beyond 1.20 per euro since the limit was imposed.
Today’s figures include both changes in foreign-currency swaps as well as increases in currency holdings as a result of direct franc sales, making it impossible to calculate the amount spent on intervention.