“The strong franc is certainly a burden for exports given waning global demand,” said Fabian Heller, an economist at Credit Suisse Group in Zurich. That’s smothering inflation and hurting exports, which make up more than half of Swiss gross domestic product. The franc has risen around 7 percent against the euro since October as the global financial crisis forced the Swiss central bank to cut its benchmark rate by 225 basis points, taking it to 0.5 percent. In an extreme case, it can commit itself at the same time to buying unlimited currencies at a fixed-exchange rate.” “The SNB is able to sell unlimited Swiss francs versus another currency. “With short-term rates of practically zero, the SNB can’t prevent a further appreciation in the Swiss franc through a rate cut,” Hildebrand said in a speech in St. Swiss National Bank Vice-President Philipp Hildebrand said policy makers are prepared to intervene in currency markets at fixed exchange rates if necessary to prevent a “renewed appreciation” of the franc. The only connection I can see to recent events is a link I posted in my links on Jan 22nd. The general issue conditions as well as the conditions applying to the individual issues and their results will be announced on the SNB website (Financial markets, Monetary policy operations, SNB USD Bills).
16 of the Banking Ordinance, these securities may be counted as liquid assets. Consequently, they may also be used in SNB repo transactions. SNB USD Bills will be included in the list of collateral eligible for SNB repos. The denomination is USD 0.5 million and the SNB USD Bills are offered with terms of 28, 84 and 168 days. The auction will take the form of a variable rate tender with allotment according to the Dutch auction method. These parties may also accept subscriptions from third parties. All parties who are authorised by the SNB to participate in both the CHF repo market and the primary and new issues market section of Eurex Zurich Ltd are eligible to take part in the auctions. After that, auctions of SNB USD Bills will be held once every two weeks. to 10.30 a.m., via the Eurex Zurich Ltd electronic trading platform. The first auction of SNB USD Bills is to be held on Monday, 16 February 2009, from 10.00 a.m. The instrument will be employed as of mid-February 2009 and will be used until further notice to finance the SNB’s loan to the SNB StabFund. It will issue its own debt certificates in US dollars (SNB USD Bills) with terms of less than one year. The Swiss National Bank (SNB) is introducing a new monetary policy instrument. But, I thought I would posit it because a reader tipped me off to a development via the Blog Alea (hat tip Scott): What are the Swiss doing selling dollars? I don’t have an answer to this question.