The Swiss National Bank’s foreign-currency reserves rose to record in July, a month when the franc weakened against both the dollar and the euro.
The reserves increased 3 percent to 531.8 billion francs ($542 billion) from 516 billion in June, according to data published on the central bank’s website on Friday. SNB Spokesman Walter Meier declined to comment on the data.
The central bank’s foreign-currency reserves mushroomed due to interventions it waged to defend its cap on the franc, set in 2011. Despite having abolished the ceiling in January, SNB policy makers have said repeatedly they’re ready to intervene if needed to ensure monetary conditions remain adequate, with SNB President Thomas Jordan on June 29 uncharacteristically admitting to interventions to “stabilize” the franc amid Greece’s debt crisis.
“The fact that the franc has weakened, I think it’s the main driver for the gain in reserves,” said Alessandro Bee, strategist at Bank J Safra Sarasin Ltd in Zurich. “I can’t imagine that there were big interventions, since the franc was weaker toward the end of the month.”
During the month of July, the franc, which investors tend to buy at times of heightened market stress, depreciated 1.8 percent against the euro and 3.2 percent against the dollar, according to data compiled by Bloomberg. Those two currencies made up almost three quarters of its reserves at the end of the second quarter.