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SWISS NATIONAL BANK

Swiss central bank to open Singapore branch

The Swiss National Bank plans to open its first branch abroad, in Singapore, to better manage its growing foreign exchange reserves and assets in the Asia-Pacific region.

Published: 18 December 2012 11:58 CET
Swiss central bank to open Singapore branch
Photo: Malcolm Curtis

"A local presence will allow the SNB to extend its coverage of markets in Asia, and will facilitate its round-the-clock operations on the foreign exchange market  for example, to enforce the minimum exchange rate," the Swiss central bank said in a statement released on Tuesday.

The SNB has seen its foreign currency reserves swell in recent years, especially as it implemented in September 2011 an exchange rate floor of 1.20 francs for each euro to keep the currency from strengthening further.

The Swiss central bank said it has sought to diversify its investments, turning to new markets, while Asia's economic importance has grown considerably in recent years.

The SNB said it had looked at a number of locations in the Asia-Pacific region, but settled on Singapore due to its large financial marketplace, sound infrastructure and legal environment, plus proximity to emerging markets.

The branch is scheduled to open in mid-2013 and will have seven staff members, the SNB said.

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SWISS NATIONAL BANK

Why is the demand for 1,000-franc banknotes growing in Switzerland?

Large-denomination banknotes, like the 1,000-franc note, are rarely used for everyday transactions in Switzerland. So why are they becoming more popular?

Published: 13 January 2021 15:21 CET
Why is the demand for 1,000-franc banknotes growing in Switzerland?
The kind of banknotes the Swiss like to stash away. Photo by AFP

The demand for 1,000-franc notes has risen in the past months, data from the Swiss National Bank (SNB) indicates.

CHF1,000 converts to approximately €925.75, £824,63 or $US1126.98. 

Whether withdrawing the money from an ATM machine or directly from a bank, customers request large-bill denominations more often than before.

“We do know there is more cash being currently withdrawn in large notes, but it changes hands less often” Sarah Lein, a monetary policy expert from the University of Basel told SRF public broadcaster.

This means the money is not being spent but stashed away.

“We can conclude that some large notes end up in a safe”, she added.

READ MORE: Switzerland’s economy forecast to recover 'from summer onwards' 

The reason, she said, is that many banks charge their customers negative interests on large deposits.

“Therefore, it could be cheaper to simply withdraw the cash in large notes and keep it in a safe, especially since inflation has been extremely low for a long time”, Lein added.

This is not unusual — in times of crisis, more cash is often in demand.

But could this cause the shortage of 1,000-franc bills?

That is not likely to happen, Lein pointed out.

“Both the central and commercial banks have enough cash stored in their vaults to meet such demand. So there is always enough money available”, she said.

There is about 48.6 billion francs floating around in the form of 1,000-franc notes, constituting 59 percent of all Swiss notes in circulation. 

It is the world’s second-largest denomination after Brunei's B$10,000 note.

READ MORE: What do people in Switzerland spend their money on?

 

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