Bloomberg News

SNB May Have Sold 10-11 Billion Francs for Euros, Banks Say

October 06, 2011

(Update prices in last paragraph.)

Oct. 6 (Bloomberg) -- The Swiss National Bank may have spent 10 billion ($11.9 billion) or 11 billion francs on euro purchases last month to curb the local currency’s strength, according to estimates by Nomura International Plc and UBS AG.

Switzerland’s central bank said today its foreign-currency holdings rose to a record 282.4 billion francs at the end of September from 253.4 billion francs the prior month. The data included changes in foreign-currency swaps, masking the increase in foreign-exchange holdings resulting from franc sales. The SNB imposed a ceiling on the franc at 1.20 per euro on Sept. 6.

“We estimate, extracting from valuation effects, they bought around 11 billion francs worth of euros,” Geoff Kendrick, the European head of currency strategy at Nomura, wrote in an e-mailed note to clients.

The figure was derived from Nomura’s spreadsheet which has the share of reserves by currency, Kendrick said. The calculation was based on an assumption that the percentage of euros in the reserves remained unchanged from the second quarter at 55 percent, he said.

UBS, Switzerland’s biggest bank, estimated the SNB sold 10 billion francs to buy euros last month.

“Combining the latest officially announced currency allocation across holdings by the SNB for Q2 with the latest price action in the respective franc crosses, the data suggest an extra increase of foreign currency holdings in the whereabouts of 10 billion francs,” wrote Reto Huenerwadel, a senior economist at UBS in Zurich. “This is roughly the amount that could be attributed to foreign-currency intervention.”

The franc weakened 4.8 percent against the euro in September. The currency declined 0.4 percent today to 1.2373 per euro at 5:25 p.m. in London.

--Editors: Nicholas Reynolds

To contact the reporters on this story: Anchalee Worrachate in London at

To contact the editors responsible for this story: Daniel Tilles in London at

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