The Swiss National Bank is opening a branch in Singapore to allow for round-the-clock management of its foreign exchange reserves, which it needs to tap to defend the safe-haven franc from over-heating.
The SNB, which imposed a 1.20 per euro limit on the soaring franc in 2011 to prevent a recession and deflation, has had to intervene heavily to keep the lid on the currency, swelling foreign exchange reserves to 72 percent of national output.
“A local presence will allow the SNB to extend its coverage of markets in Asia, and will facilitate its round-the-clock operations on the foreign exchange market – for example, to enforce the minimum exchange rate,” it said in a statement.
The SNB said the move also came against the backdrop of attempts to diversify its investments, currently largely held in highly-rated government debt in euros, dollars and pounds sterling.
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