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SNB purchased 86.1 billion Swiss francs in foreign currency in 2015 to weaken franc

Published 24/03/2016, 07:35
© Reuters.  SNB purchased 86.1 billion Swiss francs in foreign currency in 2015 to weaken franc

ZURICH (Reuters) - The Swiss National Bank (SNB) purchased 86.1 billion Swiss francs (62.58 billion pounds) in foreign currency last year to enforce a minimum exchange rate, scrapped in January, and influence exchange rate developments, according to its annual report published on Thursday.

The SNB said that, aside from purchasing foreign currency, it did not conduct any monetary policy-related open market operations last year.

"The SNB intervenes in the foreign exchange market as necessary in order to influence monetary conditions," the SNB said in the report.

Currency intervention and negative interest rates are the SNB's main tools to protect Switzerland's export-oriented economy from the effects of too great an appreciation of the franc. If the SNB buys foreign currency, such as euros or dollars, it helps to weaken the franc against the other currency.

The SNB scrapped a cap of 1.20 francs per euro on Jan. 15 last year after defending it for more than three years. It said it had had to intervene "on an increasingly large scale" during the first two weeks of January last year.

SNB Chairman Thomas Jordan received compensation of 1.15 million francs last year, including social contributions paid by his employer, after 1.14 million in 2014.

($1 = 0.9759 Swiss francs)

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