resting Once more in the light of emerging Worries about the global economy, the hope of the Central banks. You should with interest rate cuts or investment, the location of purchases save. The Swiss national Bank under additional pressure. If you don’t go along with their own measures, threaten investments in Swiss francs to be attractive, which would give the franc another boost.
in the past week, the EUR price in Swiss francs has fallen under 1.06 and the lowest in the last five years. A lower Euro price represents an appreciation of the Swiss franc. Thus, the course is situated on a level, with the smaller export more competitive companies are capable of.
3.5 billion Swiss francs intervened
That it came in spite of the panic on the capital markets to a greater appreciation of defensive measures of the national Bank. From the change in the current accounts of the banks at the SNB, we can estimate that the Central Bank intervened last week, with 3.5 billion Swiss francs in the foreign exchange markets.
Overall, the current accounts since mid-January, even more than 11 billion Swiss francs in the course. The Central Bank buys on the market in Euros, so she writes the banks sight Deposits well.
Would you come to a special factor to help, would you even have to spend any more money. Because the Euro appreciated against the Dollar, an appreciation. The reason for this, however, is not reassuring: Many international investors have borrowed in the run-up to the crisis in the common currency and those against currencies such as the Dollar sold, because higher interest rates are to be expected.
This type of transactions are called Carry Trades. This has weakened the Euro. In view of the crisis in the last week, investors wanted debt now your Euros as quickly as possible to settle, which is why they had to use the Euro to buy. And the the community currency has helped to achieve a high.
48.9 billion francs in profit
writes the UBS in an evaluation is completed, this reversal has not been. The result is that The Euro threatens to tilt back to the weakness – which, in turn, a new round of appreciation of fear. To prevent this, would have to intervene, the national Bank is even more extensive than in the past. Or lowering the interest rates deeper into negative territory.
to make matters worse, in the face of the current panic, other Central banks lower their interest rates, or in some other way, the money floodgates are likely to open, such as through bond purchases. Of the US Federal Reserve Bank (Fed) are already reductions of up to three interest rate expected this year. So Fed Chairman Jerome Powell was confirmed on Friday, if necessary, all the resources of the Central Bank to support the economy.
representatives of the European Central Bank have signalled that the ECB would intervene if necessary, supporting. Analysts expect up to two cuts in the Deposit rate for banks deeper into negative territory. Currently this is at Minus 0.5 percent. A first such step could be carried out on Thursday in a week.
The appreciation of the Swiss franc and the falling stock markets, however, have not only consequences for the Swiss economy, but also for the expected profit of the national Bank. On Monday, she gave a profit of 48.9 billion Swiss francs for the 2019 known and, therefore, its estimate in January to be confirmed. Alone 32.9 billion can be attributed to price gains on their equity investments.
The SNB has already announced in January that it would increase, given the high profit of the previous year, and high reserves from previous Win, the profit distribution to the Confederation and the cantons over the previous maximum limit of 2 billion Swiss francs for the last and the current year. Now, how much is clear: There is a maximum of a further 2 billion, and under the condition that the distribution reserve (reserves of previous years, plus whereabouts includes profit after dividends) of at least 40 billion.
As in the distribution reserve at the end of the year, 84 billion Swiss francs, the condition is met for the additional payout for 2019. It goes to the stock and currency markets, in the same style as in the last week, is at risk, the new maximum payout of 4 billion Swiss francs for the current year. How to do it with the distributions in the later years, you must be between the Department of Finance and the SNB re-negotiated.
Created: 02.03.2020, 17:49 PM
