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SNB forex interventions rise to CHF110bn in 2020

Two people in front of SNB building in Bern.
At the end of 2020, the SNB’s total assets came to CHF999 billion, compared to CHF861 billion one year earlier. Keystone / Peter Klaunzer

The Swiss National Bank (SNB) spent CHF110 billion ($118 billion) on the foreign currency markets last year as it battled to apply the brakes on the franc’s rising value during the pandemic.

The level of interventions was up from CHF13.2 billion in 2019 and was at its highest level since 2012, the central bank’s annual reportExternal link said on Monday.

“Appreciation pressure on the Swiss franc, which was particularly high in the first half of the year due to uncertainty surrounding the pandemic, necessitated CHF90 billion in interventions during that period. Pressure on the Swiss franc decreased in the second half of the year, meaning that fewer interventions were required,” the SNB wrote in its annual report.

The coronavirus pandemic increased investor interest in the safe-haven Swiss franc, while the US dollar generally fell in value against other currencies last year.

At the end of 2020, the SNB’s total assets came to CHF999 billion, compared to CHF861 billion one year earlier. Total currency reserves stood at CHF962 billion at the end of 2020. The majority of these reserves (91%) was held in the form of foreign currency investments, the remainder in gold (5%).

Last December the US treasury branded Switzerland a currency manipulator for its heavy interventions on foreign currency markets. However, undeterred, the SNB has vowed to continue with its foreign currency intervention in the future.

“The SNB has sufficient scope for expanding its balance sheet further, should this be necessary for monetary policy reasons,” an SNB spokesman told Reuters on Monday.

“Foreign exchange market interventions and the associated expansion of the balance sheet are currently a necessary monetary policy instrument and have nothing to do with currency manipulation.”

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