The Swiss National Bank (SNB) would sell 250 tonnes of gold before September 2009 in order to increase its foreign exchange reserves. At current prices, the gold sale will earn $5.24 billion.

SNB said that the proportion of its currency reserves held as gold has increased by about a quarter since mid 2005, from 33 per cent to the current level of 42 per cent, mainly due to the sharp rise in the gold price. According to the bank the current sale is organized to rebalance the composition of its currency reserves and reduce the overall risk on its assets.

The sale will comply with the second Gold Agreement of 8 March 2004, which says that annual sales by all signatories may not exceed 500 tonnes, in order to mitigate the impact on the market.

After the sales are completed, the Swiss National Bank's gold holdings will amount to approx 1,040 tonnes.