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Feb 12 - 10:55 AM

Goldman Sachs: Assessing Speculation on SNB Intervention

By eFXdata  —  Feb 12 - 09:31 AM


Goldman Sachs addresses the rising speculation surrounding the Swiss National Bank's (SNB) potential intervention to weaken the Swiss Franc. Recent data releases, including a modest increase in foreign reserves and sight deposits, have contributed to these discussions. However, Goldman Sachs maintains the view that the SNB is not currently engaging in measures to devalue the currency. The fluctuations in sight deposits are attributed to various factors not necessarily linked to intervention, while the growth in reserves is likely due to valuation adjustments.

Key Insights:

  • Sight Deposits and Foreign Reserves: Although there's been an observable rise in sight deposits and foreign reserves, Goldman Sachs suggests these changes do not definitively indicate SNB intervention. Sight deposits can fluctuate for multiple reasons, while the uptick in reserves is possibly due to valuation effects rather than active market operations.

  • Valuation Effects: The analysis posits that the recent increase in foreign reserves, as reported, is more likely attributable to valuation changes in the existing reserve assets rather than fresh market interventions by the SNB.


Despite recent data stirring speculation about the SNB's possible actions to weaken the Franc, Goldman Sachs advises caution in jumping to conclusions regarding intervention. The bank emphasizes the importance of distinguishing between routine financial fluctuations and deliberate policy actions, suggesting that current observations lean more towards the former. This perspective offers a nuanced understanding of the dynamics at play, underscoring the complexity of interpreting central bank activities based solely on reserve and deposit data shifts.

Goldman Sachs Research/Market Commentary


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