SNB annual report provides insights into exchange rate move

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The Swiss National Bank (SNB) has published its annual report today, providing further insights into the surprise decision in January to abandon the fixed exchange rate between franc and euro.

The report highlights mounting pressure on the Swiss National Bank by the beginning of the year due to successive devaluations of the euro. “It became evident that the minimum exchange rate could only be enforced through ongoing intervention in the foreign exchange market. This would have resulted in an uncontrollable expansion of the balance sheet, to a level that might even have been several times Swiss GDP” the report stated.

The report also revealed that the total volume of SNB interventions towards the end of the year amounted to CHF25.8bn (€24.5bn), which remains significantly below CHF 188bn (€179bn) intervention in 2012, when the SNB first introduced the fixed exchange rate.

The SNB’s assets totalled CHF 561bn (€534bn), which represents an increase of CHF 71bn (€67bn) compared to the previous year, due to a combination of an increase in the value of currency reserves by CHF 64bn (€60.9bn) and income growth in currency reserves.

All exchange rates as of 26.03.2015

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