SNB Q1 FX reserve

The SNB released Q1 FX reserve holding details earlier, showing renewed diversification flows after a fairly inactive Q4.

In Q1, the SNB was an aggressive buyer of stocks (CHF 10 billion adjusting for valuation effects) with the share of equities in the CHF 446 billion reserve portfolio rising to 15% from 12% in Q4. The SNB now holds CHF 67 billion of equities (in 1200 companies in a broad range of developed countries) versus CHF 52 billion in Q4.

Most of these new equity purchases were funded by the SNB running down its cash balances rather than by switching out of fixed income.

The central bank’s cash balances (held with other central banks) declined from 20.0% in Q4 to 17.7% of the total. At the end of Q1, the SNB held around CHF 78 billion in cash, which it could yet deploy in securities markets in coming quarters (prior to the massive expansion in its balance sheet in 2009-2011, the SNB typically had a cash ratio of less than 10%).

The SNB also continued to diversify into “non-traditional reserve currencies, outside the G4, with the stock of “other currencies” (includes AUD, DKK, SEK, SGD and KRW)


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