The Swiss National Bank purchased about 80 billion euros of sovereign debt in the euro area’s so- called core countries in the first seven months of the year, driving down yields, Standard & Poor’s said in a report today. The decision by Switzerland’s central bank to stem the appreciation in the Swiss franc has led to a “de facto recycling� of funds to the euro area’s core countries of Germany, France, the Netherlands, Finland and Austria, the credit-rating company said. S&P said the SNB’s euro-area bond buying in the period amounted to about 48 percent of the estimated combined full-year deficits for the euro-area’s core for 2012, up from 9 percent in 2011. The Swiss central bank’s action has “significantly contributed� to declining yields on bonds issued by these countries, S&P said. The moves have come as foreign exchange reserves held by the SNB soared to 79 percent of the Swiss gross domestic product in mid-2012 from 15 percent at the same period in 2008, the credit-rating company said. To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net

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