The Swiss National Bank (SNB) has announced it will open a branch in Singapore in order to diversify its assets and address the growing importance of Asian financial markets.
The Zurich-based central bank said the move will facilitate round-the-clock operations on the foreign exchange market which have been of increased importance since the SNB's foreign exchange reserves have increased substantially since 2009 in order to defend its currency's appreciation.
Break from the past
This is the first branch to be opened by the Swiss central bank in Asia and follows a move made two years ago to include Australian and Singapore dollars in addition to the Japanese yen in its basket of reserve currencies.
Following the news, Citywire Global spoke to a Swiss fund selector who said he did not particularly welcome the launch of the central bank's new Singapore office.
'I don't see it as necessarily good news if the central bank does have branches in order to diversify its assets - it means that its getting more difficult for the central bank to manage its portfolio,' Andrea Guzzi of IST Investmentstiftung in Zurich told Citywire Global on Tuesday.
The central bank reported in August this year that Swiss investment in foreign assets had seen much lower returns than in previous years, which is a trend that has seen the central bank tap new markets.
The news ends a year that has seen a host of headlines including the resignation of the Swiss central bank governor on alleged misuse of insider knowledge as well as a repeated effort by the central bank to defend its currency against further strengthening.
The Singapore-based office is scheduled to open mid-2013 with seven employees.