By Jules Rimmer
The Swiss National Bank disclosed that 39% of its forex reserves were denominated in dollars at the end of June 2025.
Global currency markets will pay close attention to the following statement Tuesday from the Swiss central bank’s vice-president, Antoine Martin: “With a balance sheet like the SNB’s, if we want to invest in a diversified way, we must allocate a significant portion of our dollar holdings to euros. We are doing this.”
The 11% decline in the dollar index DXY from its peak this year has been driven in no small part by expectations that President Donald Trump’s introduction of radical and disruptive trade policies would trigger a diversification of central bank reserves away from the dollar but thus far, few of them have actually articulated as much.
According to Swiss National Bank statistics, its foreign exchange reserves totaled more than $1 trillion at the end of June 2025 with dollars representing 39% of that sum and euros 37%. Any shift in the composition of the world’s third-largest reserve assets then, would be considered significant by foreign exchange traders.
The euro (EURUSD) fell on Wednesday but has gained 12% vs. the dollar this year.
In an interview with Agefi, Martin added that bitcoin (BTCUSD) does not yet reach its criteria for investment and that they saw no need to increase or decrease their holdings in gold (GC00) , currently estimated to be around be the seventh-biggest globally at around 1040 metric tons.
At present Switzerland is dealing with the 39% tariffs imposed by the U.S. – the highest of any advanced economy – but despite the economic uncertainty this has created, the SNB is reluctant to cut interest rates.
This is partly because with rates at zero, cutting them complicates things in the Swiss financial system and Martin pointed out that there must be a higher bar for taking rates into negative territory than there is for easing when rates are positive.
It’s not as if zero interest rates have hindered the Swiss franc (CHFUSD) anyway. Year-to-date, it has appreciated more than 12% versus the dollar although Martin pointed out that this was largely owing to dollar weakness than franc strength. The currency strength makes exports even harder than the U.S. tariffs on their own but Martin is confident the Swiss economy can weather the impact.
Unsurprisingly given the topicality of central bank independence in light of Lisa Cook’s travails, Martin was pressed for an opinion on the subject: “It is crucial that central banks remain technocratic institutions, in the best sense of the word, and independent,” was his response.
-Jules Rimmer
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08-27-25 0712ET
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