SNB’s November Foreign Currency Reserves Increase Slightly

The Swiss National Bank’s foreign-currency reserves increased just 0.2 percent in November as the franc held steady against the dollar and the euro.

The Zurich-based central bank’s holdings stood at 435.663 billion Swiss francs ($485.4 billion) last month, compared with 434.724 billion francs in October, data on its website showed today. Economists had expected them to climb to 435.1 billion francs, according to the median of four estimates compiled by Bloomberg.

The SNB has amassed record foreign-exchange reserves through currency-market interventions to defend the cap of 1.20 per euro it set on the franc in September 2011. It cited the risk of deflation and a recession when it implemented the ceiling. SNB President Thomas Jordan said late last month there was no reason to remove the ceiling on the franc, given the economic outlook.

Consumer prices rose 0.1 percent in November compared with a year earlier, whereas economists had expected them to fall 0.1 percent. Prices were unchanged from October, separate data published today showed.

The central bank hasn’t intervened in currency markets for more than a year, SNB policy makers have said. The holdings, calculated according to International Monetary Fund standards at the beginning of each month, hit an all-time high of 444 billion francs in May.

The franc is popular among investors as a haven at times of heightened market stress. Their anxiety about the euro area’s debt crisis prompted the franc to nearly reach parity with the euro in August 2011. Last month, the Swiss currency was little changed against the euro and the dollar.

At the end of the third quarter, the SNB held 48 percent of its foreign-currency reserves in euros and 27 percent in dollars. With stock markets rallying this year, the SNB has boosted the proportion of equities it holds to a record 16 percent. The remainder of the reserves is primarily invested in highly rated government bonds.

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