SNB Officials Had Brexit Phone Call at Dawn, Jordan Tells MatinBy
Swiss central bank admitted to interventions after U.K. vote
Investors typically buy francs at times of high uncertainty
Rate-setters at the Swiss National Bank conferred by telephone at 6 a.m. on June 24 after having spent the night keeping an eye on the market impact of the U.K.’s vote to leave the European Union, President Thomas Jordan said.
“I was at home with my phone and my tablet, and I was in contact with staff in charge of markets,” Jordan told newspaper Le Matin Dimanche in an interview published on Sunday. “I took a look at the exchange rate every 15 minutes while following the news from the U.K.”
The details of how Jordan spent the early hours of June 24, as initial results from Britain’s referendum came in, constitute a rare glimpse of operations at an institution that famously rocked global currency markets in 2015 by giving up its minimum exchange rate.
Although it openly pursues a policy of negative interest rates and a pledge to wage currency market interventions, which Jordan reiterated in the Le Matin Dimanche interview, its policy makers rarely say how and when they actually step into markets.
One such occasion took place on the day following the U.K. vote, when the SNB issued a statement admitting to its purchases of foreign currencies to stabilize the franc, which investors typically buy at times of market stress. The referendum to leave the bloc, held amid concerns opinion polls weren’t credible, sent the pound tumbling.
“I think that Brexit was a surprise for the markets,” which caused turbulence, Jordan told the paper. “There was a pressure on the franc, but the central bank was ready to intervene. And we did that.”
In the wake of the Brexit interventions, the SNB’s holdings of foreign currency hit a record high of 608.8 billion francs ($619 billion) in June, data published on July 7 showed. Still, when Le Matin Dimanche asked Jordan whether the interventions had amounted to 6.8 billion francs, Jordan declined to comment on the figure.