SNB: strong currency reserves to defend swiss economy

The Swiss National Bank (SNB) said Monday that it would add 4.6 billion Swiss francs ($4.5 billion) to its financial buffer for currency reserves in an effort to strengthen the central bank's finances against any future bouts of economic weakness, raising the provisions to 62.8 billion francs.

"The annual allocation will continue to be determined on the basis of double the average nominal economic growth rate over the previous five years. However, a minimum annual allocation of 8 percent of the provisions will now also apply," the SNB said in a statement.

With nominal GDP growth over the last five years averaging 1.9%, the central bank will apply the rule of the minimum rate of 8% for 2016, as it said.

The SNB's foreign-exchange reserves have swelled in recent years as the bank has tried to limit the Swiss franc's strength by purchasing stocks and bonds denominated in foreign currencies. The SNB's foreign reserves now equal roughly the size of Switzerland's gross domestic product.