Switzerland’s foreign currency reserves have grown by 40% this year, leading some analysts to dub it the “new China,” according to CNBC. The country is now the world’s sixth largest holder of foreign exchange, up from 9th last year. The Swiss National Bank is buying billions of euros a day to defend the franc in an effort to protect the country’s exporters.
The SNB may not be able to maintain the pace of its euro-buying program, which is also affecting other central banks. The value of other currencies is rising as the SNB sells back its euros, yet it still can’t exchange as many as it buys. The SNB’s half-year results indicated it is having trouble rebalancing its holdings, and its actions have resulted in moves in currencies like the Australian dollar and Swedish krona.