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Swiss National Bank's forex reserves shrink during Q3

Published 22/12/2022, 12:17
© Reuters. FILE PHOTO: The Swiss National Bank (SNB) logo is pictured on its building in Bern, Switzerland June 16, 2022. REUTERS/Arnd Wiegmann

By John Revill

ZURICH (Reuters) -The Swiss National Bank's foreign currency reserves shrank during the third quarter, data showed on Thursday, as weakening global stock and bond markets hit the central bank's forex investments.

Total reserve assets held by the central bank declined to 873 billion Swiss francs ($939.92 billion) at the end of September from 920 billion francs at the end of June.

Most of the downturn was mainly due to the reduced value of stocks and bonds the SNB holds, although the Swiss franc's appreciation also lowered its value when converted into francs.

The data also showed that the SNB acquired a net 2.4 billion francs of forex between July and the end of September.

The figure was a surprise as the central bank has been selling foreign currencies in recent months to maintain the high nominal value of the franc - an aid in its battle against resurgent inflation.

Still, economists said the data should not be seen as a direct indication of the SNB's interventions because the figures included interest and foreign exchange income from the bank's forex reserves.

"You can't infer the FX interventions based on this data because they are partial," said Credit Suisse (SIX:CSGN) economist Maxime Botteron, who estimates the SNB actually sold around 3.5 billion francs from its forex reserves in the third quarter.

He said the foreign exchange transaction data, which the SNB is due to publish on Dec. 30, would give a better indication of its buying and selling of foreign currencies.

The SNB declined to comment.

The central bank also published data showing the Swiss current account surplus widening to 24.1 billion Swiss francs ($26.08 billion) from 21.7 billion francs a year earlier.

© Reuters. FILE PHOTO: The Swiss National Bank (SNB) logo is pictured on its building in Bern, Switzerland June 16, 2022. REUTERS/Arnd Wiegmann

The increase, based on a high surplus in the goods trade and a relative low deficit in services trade and primary income, was moderate because it lapped high comparisons with a year earlier, the SNB said.

($1 = 0.9288 Swiss franc)

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