The Swiss central bank stepped into the market on Wednesday, injecting 80 billion francs ($101 billion, 89 billion euros) in liquidity, but failed to stem the currency’s rise against the euro and the dollar.
At 0723 GMT the safe haven currency was up 1.17 percent against the dollar, trading at 0.7867 francs per dollar, and had risen 1.57 percent against the euro, trading at 1.1285 francs.
Earlier in the morning, the Swiss National Bank announced it was expanding sight deposits, or funds that commercial banks can withdraw without notice, from 120 billion to 200 billion francs.
“In order to achieve this new target level as quickly as possible, it will continue to repurchase outstanding SNB Bills and to employ foreign exchange swaps,” it said in a statement.
This was the bank’s second intervention in a week, after having increased liquidity from 80 billion francs to 120 billion on August 10.
“Nevertheless, the Swiss franc remains massively overvalued,” the central bank said.
“The SNB has therefore decided to expand again significantly the supply of liquidity to the Swiss franc money market,” it said.
The country’s central bank is under increasing pressure to stem the currency’s rise, as investors seek a safe haven from fears of sovereign debt crisis in developped economies and sluggish economic growth.
Export-led Switzerland has been worried about the rise of the franc, with several Swiss firms blaming the strength of the currency for reducing earnings they were repatriating.
The Swiss franc has risen around a quarter against the dollar and 20 percent against the euro since 2009. Last week, it came close to parity with the euro and reached a record 0.7085 against the dollar.
Also last week, top Swiss central bankers said in interviews that all options were on the table to stem the currency’s rise, including pegging it to the euro.