Dec. 18 (Bloomberg) -- The Swiss central bank said it will open a branch in Singapore to help diversify its assets as it defends the franc’s exchange-rate cap.
“A local presence will allow the SNB to extend its coverage of markets in Asia,” the Zurich-based Swiss National Bank said on its website. The Singapore branch will help “round-the-clock operations on the foreign-exchange market, for example, to enforce the minimum exchange rate.”
The SNB last week maintained a 15-month old currency ceiling at 1.20 francs per euro to protect the economy, saying it will uphold the measure “with the utmost determination.” The SNB’s foreign-currency reserves have surged almost 70 percent over the past year to 424.8 billion francs ($464 billion) at the end of November.
The central bank said on Oct. 31 that 48 percent of its currency assets were in euros, down from 60 percent the prior quarter. Its yen holdings made up 9 percent, compared with 8 percent previously, as other currencies, including Singapore dollars, accounted for 4 percent of reserves.
“To reduce concentration risk, the SNB aims for a broad diversification of its investments, and has turned to new markets as a result,” including Asian currencies, and potentially stocks and bonds, it said.
The Singapore branch is scheduled to open in mid-2013, and will have seven staff members, the SNB said.
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