"As a consequence of the realignment of the financial centre and the planned withholding tax, we assume that a total of hundreds of billions of francs will flow out of Switzerland"
- Juerg Zeltner, head of UBS wealth management
The reserves held by the Swiss National Bank unexpectedly for a second straight month in November, as the nation's currency hovered above the 1.20 per euro cap, which was imposed by the central bank in September 2011. The SNB held 424.826 billion Swiss francs ($456.16 billion) in foreign currency in the last month, compared with a revised 426.769 billion francs in October, the report by the International Monetary Fund showed Friday. The SNB has been selling francs for other currencies, mostly euros, in order to avoid the risk of deflation and a recession, when investors rushed to buy Swiss francs as a safe haven from the Eurozone's debt crisis. As the tendency remains negative, the SNB is likely to have less cash to spend to defend the 1.20 per euro cap.
"It is above all a reason to keep the minimum exchange rate. The weak global economy and the difficult situation for sectors exposed to international competition clearly show us that it is absolutely necessary to keep the minimum exchange rate," said the SNB chairman, Thomas Jordan.
"As a consequence of the realignment of the financial centre and the planned withholding tax, we assume that a total of hundreds of billions of francs will flow out of Switzerland," said Juerg Zeltner, head of UBS wealth management.
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