Switzerland’s central bank chief gave a vote of confidence to US government bonds even after the world’s biggest economy was stripped of its last top credit rating by Moody’s.
“US Treasuries are very liquid,” Swiss National Bank President Martin Schlegel said Monday in Lucerne. “There is currently no alternative to them and it’s not foreseeable that there will be an alternative.”
The SNB has amassed more than 700 billion Swiss francs ($838 billion) worth of foreign currencies, with almost two thirds of that held in government bonds. Schlegel said that those holdings include US Treasuries, but didn’t specify what amount.
Asked about how the US downgrade at Moody’s on Friday will affect SNB investment decisions on its reserves, Schlegel highlighted that “we look at the ratings — but typically, single ratings have no effects on the asset allocation.”