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Surging franc pushes SNB into the red

The Swiss National Bank has announced a consolidated loss of Sfr.10.8 billion for the first half of 2011 largely as a result of the surging value of the Swiss franc.

Published: 29 July 2011 10:02 CEST

Surging franc pushes SNB into the red

SNB

The bank lost Sfr.9.9 billion on its foreign exchange holdings alone in the first six months of the year.

The Swiss currency, regarded as a safe haven in turbulent times, has risen by 33 percent against the US dollar and 20 percent against the euro over the past 12 months.

This has reduced the value of SNB’s foreign exchange holdings which it had accumulated in 2009 and 2010 in a bid to stave off deflation by intervening in the markets.

“The appreciation of the Swiss franc against all major investment currencies resulted in substantial valuation losses,” the SNB said in a statement issued on Friday.

The losses at SNB could have political ramifications as the country’s 26 cantons rely on dividends from the bank to help finance their budgets.

Christoph Blocher of the right-wing Swiss People’s Party (SVP) had previously called on the bank’s chairman, Philipp Hildebrand, to resign when the SNB announced losses of Sfr.26 billion for 2010 due to its foreign currency positions.

Switzerland goes to the polls in October and the SVP looks likely to hold onto its position as the biggest party in the lower house of parliament.

Twint app can be installed on a mobile phone.

“Twinting” money with a smartphone is easy and convenient. Photo by Andrea Piacquadio from Pexels

In Switzerland, the word “Twint” is used both as a noun and a verb.

As a noun, it describes the mobile application which allows you to pay for various goods and services practically everywhere in the country.

As a verb, (“to twint”), it means to send someone money, or receive it, via the same app.

So what exactly is Twint?

Simply put, it is digital cash (not to be confused with bitcoin, which is digital currency) that was first introduced in Switzerland in 2014 and has become very popular since then.

Twint logo. Image by Twint.ch

People like it because it is an easy and quick way to make instantaneous payments, especially in situations when credit cards or physical cash can’t be used.

A big part of its convenience is that it can be used at cash registers, vending machines and parking meters, as well as in online shops — pretty much everywhere in Switzerland, even in places that don’t accept credit cards.

The only similar mode of payment would be your maestro debit card issued by your bank.

This video explains exactly how the process works.

Another advantage of Twint is that you can use it to send money to someone else’s mobile phone — as long as they also have Twint. And you can receive money the same way.

And there are no fees or charges for this service.

How does Twint work?

Anyone can use Twint, but you need a Swiss bank account or a credit card and, of course, a smartphone.

According to Twint website, you need a smartphone with either an iOS (from version 12.2 and upwards) or Android (from version 7 and upwards) operating system and Bluetooth capability (from version 4.0 and upwards).

“It is generally not possible for Twint to be used on Apple devices with an operating system older than “iOS 12.2” or on Android devices with an operating system older than “Android 7”. On Android devices without access to the Google Play Store (e.g. on certain HUAWEI models), the use of Twint app is also not possible”.

But If you have a compatible phone, installing Twint is easy.

Swiss banks offer their own version of the app, and you can download it directly from your bank’s website.

Then, when you use Twint to make a payment, the amount is debited directly from your bank account or credit card.

By the same token, if you receive payment from another Twint user, the money is automatically deposited in your account.

And you are not limited to just one Twint app.

If you have accounts is several banks, or have more than one credit card, you can install and use all of them.

READ MORE: How to open a bank account in Switzerland

Can Twint be used to make payments and receive money from abroad?

For the moment, Twint can be used solely in Switzerland and payments can be made only in Swiss francs – although this may change in future.

“We are, however, working closely with providers in other countries to develop an international and multi-currency solution”, according to Twint website.

You can find more information about Twint here.

READ MORE: Which bank is best for Americans in Switzerland?

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