There is a “new China” active in the currency markets, according to analysts, as Switzerland’s battle to weaken the franc inflates its stockpile of foreign currency reserves.

The Swiss National Bankwas forced to buy tens of billions of euros in May and June after the eurozone crisis created strong haven demand for the franc and threatened the ceiling that the central bank set for the franc last September. The SNB is prepared to buy as many euros as necessary to hold the franc at SFr1.20 to the euro.

As a result, Switzerland’s foreign currency reserves have leapt 40 per cent this year to SFr365bn ($375bn), propelling it to be the sixth largest holder of foreign exchange in the world from ninth last year, behind China, Japan, Saudi Arabia, Russia and Taiwan.