Brexit pushes SNB to highest forex purchases since scrapping cap

By Joshua Franklin ZURICH (Reuters) - Switzerland's central bank made more foreign currency purchases in the second quarter than at any time since it stunned financial markets more than a year ago by ending a cap on the Swiss franc, data showed on Wednesday. The Swiss National Bank made net foreign currency purchases of 23.3 billion Swiss francs (18.39 billion pounds) in the three months to the end of June, SNB data on the Swiss balance of payments showed. This was the highest since a 58.7 billion outlay in the first quarter of 2015, when the SNB purchased foreign currencies in the aftermath of unexpectedly scrapping a limit on the franc against the euro on Jan. 15, 2015. An unspecified amount of foreign currency purchases and negative interest rates have been the cornerstone of the SNB's strategy since the abrupt policy change sent the franc soaring. The SNB is trying to weaken the franc, which it has labelled "significantly overvalued", to support exporters whose products have become more expensive in the neighbouring euro zone, Switzerland's largest market. Worries in the run-up to Britain's June 23 referendum on European Union membership had promoted investors to buy into the franc, which is traditionally a safe-haven asset in times of uncertainty. In the aftermath of the vote, the franc pushed higher and the SNB gave rare confirmation that it had stepped into the market "to stabilise the situation". It has promised to remain active in the market if needed. Despite the SNB's actions, the franc strengthened by almost 1 percent against the euro in the second quarter. Overall, the data showed Switzerland's current account surplus totalled 17 billion francs in the second quarter, 3 billion francs less than the same period in 2015. The decline was "mainly due to a decline in the receipts surplus in primary income (labour and investment income)", the SNB said in a statement. (Reporting by Joshua Franklin; Editing by Michael Shields)