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Still growing: Swiss FX reserves climb again; inflation ticks higher

As regular as a Swiss timepiece.

Foreign-currency reserves have climbed again for the Swiss National Bank, reaching a new record high of SFr714.3bn in July, up by 3 per cent on the previous month.

The result confirms that the central bank is still nowhere close to unwinding the vast kitty it has built up to prevent the franc from rising too high. But the focus now is on when and how that will happen after the currency began a startling decline at the end of last month. Having hovered at around SFr1.09 for months, the euro has now shot up to SFr1.1460.

Meanwhile, separate data showed that annual Swiss inflation had held above zero, rising to 0.3 per cent, in line with forecasts and slightly above the 0.2 per cent rate seen in June. All things being equal, the weaker currency should help to keep the rate supported.

Unrelated, but interesting nonetheless:

The return of the wolf: A Swiss identity crisis (Aug 4)

(Top chart: Bloomberg)