Swiss Central Bank’s Singapore Office Eases Nightly Franc Watch

The Swiss central bank’s new Singapore office will ease the round-the-clock management of its exchange-rate cap, end the need for the Zurich trading desk’s night shift and help manage its investments in Asia.

Singapore’s position as a regional bond-trading center led to the choice of the city as the location of the first foreign branch in the Swiss National Bank’s 106-year history, President Thomas Jordan said today at the opening ceremony, attended by Monetary Authority of Singapore Managing Director Ravi Menon.

The Singapore office will help the Swiss National Bank defend the cap of 1.20 per euro on the franc, imposed in September 2011 after the currency surged as investors sought a haven from the euro area debt crisis. With European tensions easing, the franc weakened beyond 1.26 per euro in May for the first time since 2011.

“The night shift on the Zurich currency trading desk has ended and is replaced by the day shift in Singapore,” Fritz Zurbruegg, a Swiss National Bank Governing Council member, said in an interview in Singapore. “The presence here in Singapore helps a lot as there is a handover. Our Singapore team provides the main information of the day to the team in Switzerland.”

More than 500 asset managers oversee about $1.1 trillion of assets in Singapore, Menon said. The Swiss National Bank is the first central bank to have an office in the city-state after Bank Indonesia, he said.

The Swiss central bank’s holdings in Asian currencies have doubled from 6 percent of its foreign assets in 2007, Jordan said.

Yen holdings have risen to 9 percent of foreign-currency assets as of March 29 from 8 percent in the previous quarter, according to the central bank’s website. Other currencies, including the Singapore dollar, the Australian dollar and the South Korean won, gained to 5 percent from 4 percent, it said.

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