Increase In Swiss FX Reserves Hints At Intervention

Foreign currency reserves held at the Swiss National Bank are reported to have increased in April, implying that the central bank might have intervened in markets in an attempt to weaken the franc by purchasing assets denominated in other currencies.

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Data released by the central bank showed that foreign reserves amounted to 587.57 billion Swiss francs ($607 billion) last month, an increase of 11 billion francs compared with March.

Peter Rosenstreich, head of market strategy at Swissquote, confirmed that the increase "is relatively sizable. We would hesitantly conclude that the SNB intervened in markets by the numbers."

SNB officials are reputed to believe that the franc is greatly overvalued. This affects the Swiss economy in two main ways: firstly by making Swiss exports more expensive in global markets and secondly, by making imported products cheaper, thereby impacting on consumer prices.

SNB officials have a number of policy tools at their disposal, one being their readiness to intervene in currency markets and another being the SNB's negative interest rates. Foreign-Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term interventions have caused a steep increase in the SNB's balance sheet in recent years with last month's foreign reserves representing approximately 90% of Switzerland's gross domestic product.