The Swiss central bank’s foreign-currency reserves fell for a second month in January as pressure on the franc eased.
Holdings declined to 427 billion francs ($469 billion) from 427.2 billion francs in December, the Zurich-based Swiss National Bank said on its website today. The holdings are calculated according to International Monetary Fund standards at the beginning of every month. Economists expected reserves of 428.3 billion francs at the end of January, the median of four estimates in a Bloomberg News survey showed.
The SNB, which has vowed to defend a franc ceiling of 1.20 per euro introduced in September 2011 “with the utmost determination,” has amassed record foreign-currency reserves in its efforts to prevent the currency from appreciating. While the expansion of the SNB’s balance sheet is of “concern,” the central bank is “fulfilling its mandate” in maintaining the cap, board member Fritz Zurbruegg said on Feb. 5.
The currency, which almost reached parity with the euro before the limit was introduced, has weakened 2.4 percent since the European Central Bank said on Aug. 2 it will buy government bonds in tandem with Europe’s rescue fund should nations request aid. The franc traded at 1.23104 versus the euro at 9:07 a.m. in Zurich. It has remained in a range of 1.20 to 1.25 since the cap was imposed, breaching it just once. Against the dollar, the Swiss currency stood at 91.01 centimes.