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(Bloomberg) -- Switzerland was again included among the countries singled out by the U.S. Treasury for the value of their currencies and exports.

That could make life more complicated for the Swiss National Bank, which has used foreign exchange interventions for the better part of a decade to counter an overvalued currency that risked tipping the economy into a recession.

The U.S. department is required by law to report to Congress twice a year on whether its major trading partners are gaming their currencies. The latest report was issued Friday. Given its interventions and trade surplus, Switzerland got added to the watch list last year, and any country deemed to be engaging in unfair practices could face penalties.

The SNB has intermittently used foreign exchange interventions to take appreciation pressure off the franc, causing its holdings of foreign currency to spiral to nearly 700 billion francs ($696 billion). It spent 67 billion francs on interventions last year -- uncharacteristically admitting to them following the Brexit vote -- and there’s evidence that it may have been active in markets this year as well. 

According to President Thomas Jordan, the SNB is only trying to limit the strength of the currency and isn’t pushing it down to artificially low levels. “The monetary policy of the central bank isn’t one of competitive devaluation,” Jordan said in Baden-Baden, Germany, on March 18.

Representatives for the SNB weren’t immediately available for comment outside regular business hours. A spokeswoman for the Swiss Finance Ministry said she didn’t expect the list to have any immediate consequences for Switzerland.

As the U.S. Treasury noted in its October 2016 report, Switzerland has only a small sovereign bond market, which limits its monetary policy options. Unlike the European Central Bank, it has not engaged in quantitative easing to fight deflationary pressures.

The currency has appreciated about 50 percent against the euro and roughly 20 percent against the dollar since 2008. That has proved a challenge for Swiss exporters, who send the lion’s share of their goods to the euro area and specialize in producing pharmaceuticals and high-quality manufactured goods.

Still, Switzerland ran a 17 billion franc trade surplus in goods with the U.S., with the value of its exports more than double the value of its imports from there, according to Federal Customs Administration data for 2016.

To contact the reporters on this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net, Alice Baghdjian in Zurich at abaghdjian@bloomberg.net.

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint, Steve Geimann

©2017 Bloomberg L.P.

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