Reuters – Switzerland on Tuesday revealed its foreign exchange reserves now total 365 billion francs ($374 billion), a rise of 50 percent in just three months and taking it to a dizzying 62 percent of Swiss annual output. A small Alpine country with a big banking industry is now the world’s sixth-largest reserves holder, behind only much larger or resource-rich countries like China, Japan, Russia and Saudi Arabia.
The reason: the Swiss National Bank’s strategy of imposing a cap on the value of the franc against the euro, a policy which obliges it to buy euros in unlimited amounts when the exchange rate hits its line in the sand of 1.20 francs to the euro.
