Swiss forex reserves increase

ZURICH: The Swiss National Bank's foreign exchange reserves rose slightly in June, official data showed on Thursday, an increase analysts said was driven by the bank's currency market interventions after Britain voted to leave the European Union.

The SNB announced on June 24, a day after Britain's referendum, that it would act to curb increases in the Swiss franc, a safe haven currency which becomes attractive to investors in times of uncertainty.

The SNB held 608.811 billion Swiss francs ($623.846 billion) in foreign currency at the end of June, compared with 602.148 billion francs in May, revised from an originally reported 602.063 billion, preliminary data from the SNB showed.  The SNB interventions amounted to around 14 billion Swiss francs in June, Markus Schmieder, an economist at Wellershoff & Partners, estimated.

"The vast majority of this share has most likely been accumulated on the days around the British EU referendum," said Schmieder. The SNB declined to comment on how much its interventions had cost so far.

It also gave no time frame for how long it would continue. Analysts said the SNB had intervened less than they had expected.

"It's quite clear that the SNB has had to intervene on a lower level around Brexit than was anticipated," said Ursina Kubli, a currency strategist at J.Safra Sarasin.

"The pressure was there, but it was somehow limited." The value of the bank's foreign currency holdings are also impacted by currency fluctuations. The SNB's announcement immediately after the Brexit vote was an unusual step as the bank normally does not comment on its activities.

"The SNB was really very visible in the market and they were very vocal," said Kubli. "That's a powerful combination and helped prevent the franc rising higher." Analysts said they expected the SNB to continue to be active in the markets to keep the franc above its current level of 1.08 against the euro.