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SNB slowed foreign currency purchases to CHF1.2bn in 2024

SNB purchased foreign currency totalling CHF 1.2 billion in 2024
SNB purchased foreign currency totalling CHF 1.2 billion in 2024 Keystone-SDA

The Swiss National Bank (SNB) was less active on the foreign exchange markets in 2024 than in previous years.

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In 2024, the Swiss central bank again acted as a buyer of foreign currencies, having sold holdings on a large scale in 2023.

Over the year as a whole, foreign currency purchases totalled CHF1.2 billion, as can be seen in the SNB’s annual report published on Tuesday. Purchases slowed down in the final quarter.

From January to September 2024, the SNB purchased foreign currency totalling CHF1.1 billion, according to the quarterly figures already published, most of this in the third quarter.

From seller to buyer

In 2023, the SNB was still a large-scale seller of foreign currencies: In the year as a whole, it sold foreign currencies worth the equivalent of CHF132.9 billion.

+ Switzerland navigates own course through inflation maze

By reducing its foreign currency reserves, the monetary authorities wanted to strengthen the franc and keep imported inflation low, which had shot up after the end of the coronavirus pandemic and the outbreak of the war in Ukraine.

However, inflation has since calmed down and is now clearly back within the targeted range of between 0 and 2%. In the course of 2024, the monetary authorities therefore lowered the key interest rate in several steps to a level of 0.5%.

According to the expectations of the majority of economists, they are now likely to make a further rate cut this week.

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Most forecasters believe the SNB will deliver a quarter-point interest rate reduction.

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