Foreign currency reserves hit record in July as franc dipped

[ZURICH] 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 per cent to 531.8 billion francs (US$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.

SNB President Thomas Jordan uncharacteristically admitted on June 29 there had been interventions to "stabilize" the franc amid Greece's debt crisis.

During the month of July, the franc, which investors tend to buy at times of heightened market stress, depreciated 1.8 per cent against the euro and 3.2 per cent 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.

BLOOMBERG