UPDATE 1-SNB's forex reserves down again as interventions ebb

Fri Dec 7, 2012 3:54am EST

* SNB seen keeping cap on franc through 2013

* Franc gained against euro and dollar in Nov

* Easing euro zone crisis lessens need for SNB to intervene (Adds details, background)

ZURICH, Dec 7 (Reuters) - The Swiss National Bank's foreign exchange reserves fell for a second month running in November, as the franc hovered above the 1.20 per euro limit the central bank imposed on the safe-haven currency in 2011.

The SNB held 424.826 billion Swiss francs ($456.16 billion)in foreign currency at the end of November compared with a revised 426.769 billion francs for October, according to preliminary data released on Friday.

The SNB imposed a lid on the franc at 1.20 per euro in September 2011 to try to prevent deflation and a recession, after investors fleeing the euro zone crisis pushed the currency up by a quarter in just a few months.

The franc strengthened somewhat against the euro and dollar from the end of October to end of November, meaning the value of the SNB's holdings of those currencies fell.

The central bank is expected to reiterate its commitment to keeping a lid on the franc when it announces its quarterly monetary policy decision next Thursday.

A Reuters poll published on Thursday showed the SNB will maintain the cap it set on the franc at least through 2013 and possibly even into 2014, while also keeping interest rates near zero.

Huge purchases of foreign currency by the SNB to defend the 1.20 limit had pushed reserves to a peak of 429.477 billion francs at the end of September, equal to almost three-quarters of national output.

But an easing of the euro zone crisis since September has seen the franc weaken away from 1.20, reducing the need for the SNB to intervene and in turn allowing it to diversify out of euros.

At the end of September, the SNB held 49 percent of its reserves in euros, 27.6 percent in dollars, 6.7 percent in pounds sterling and 4.2 percent in other currencies.

The bulk of the SNB's foreign currency reserves are held in highly-rated government debt. It increased its equity holdings to 12 percent from 10 percent during the third quarter.

($1 = 0.9313 Swiss francs) (Reporting by Emma Thomasson. Editing by Jeremy Gaunt.)