Proportion of Equities among Foreign Currency Investment of the Swiss National Bank Increases

In the 1st quarter of this year, the proportion of equities among the Swiss National Bank’s foreign currency investment increased, however, the allocation among the currencies were more or less unchanged. The share of stocks in the portfolio of the Central Bank increased to 15% at the end of the 1st quarter of 2013. It is higher than the 12% increase experienced at the end of 2012. All these data were released on the official website of the Central Bank. Incidentally, the holdings of the Central Bank of the Swiss Government bonds declined to 78% from its earlier value of 82%.

Incidentally, the Swiss National Bank has amassed the foreign exchange reserves equal to nearly 75% of the annual output of the Swiss economy as a result of the interventions it has waged for defending the cap of 1.20 per Euro which was set in September, 2011 for saving the country from experiencing a recession.

Incidentally, as the bond yields are low at this point of time, Central Banks from all over the world are buying more equities. In a recent survey done on 60 Central Banks from all over the world by Royal Bank of Scotland Group and Central Banking Publications, 23% stated that they currently own shares or intend to buy them.

The Swiss National Bank had total profit of 11.2 billion Swiss Franc in 1st quarter of 2013 and rising stock prices contributed 4.9 billion Swiss Francs to that. The data was released in a separate statement on today. Thomas Jordon, the President has already stated that Central Bank should conduct asset management with a view of implementing a monetary policy rather than for generating any sort of profit.

At the end of the 1st quarter, the Swiss National Bank has 48% of the total reserves in Euros. The figure was at 49% at the end of 2012. The Yen holdings, on the other hand, have increased to 9% from its earlier value of 8%. The share of USD however tumbled to 27% from 28%.

In the first 3 months of 2013, with anxiety among investors over debt crisis easing of Euro area, USD has advanced around 4% against Swiss Franc. Euro, on the other hand, has gone ahead by 0.9% against Swiss Franc too. These gains outweighed losses against Sterling and Yen.