The Swiss National Bank's foreign-exchange reserves, accumulated on a massive scale since 2012, dipped slightly last month to 693.5 billion Swiss francs ($721 billion), the SNB said Friday. The figures suggest the central bank has pulled back on its currency intervention efforts.
It was the second successive month, despite the central bank’s continued complaints about the effects of an “overvalued” franc.
Still, the figure remains near record levels, having increased more than 600 per cent since the start of the decade. The Swiss central bank has continued to buy foreign currency, mainly euros, in an effort to slow the franc’s appreciation.
A lower franc helps Swiss exporters and tourism. At the moment, visitors consider Switzerland expensive, with the franc currently leading the Economist Big Mac index as the currency most overvalued (by around 20 per cent) against the dollar.
SNB chairman Thomas Jordan said last month that the franc was still “significantly” overvalued, blaming its strength for the country’s sluggish recent economic growth.
The strong currency is also weighing on inflation through lower import costs. The economy returned to deflation on a monthly basis in June, while year on year price rises fell to their lowest level in seven months.
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