Swiss National Bank ready to put the brakes on rising franc
The euro briefly sank below parity versus the Swiss franc for the first time in seven years on Monday.
Martin Ruetschi
Switzerland’s central bank has renewed its pledge to intervene in the currency markets to halt a rise in the franc after safe-haven inflows caused by the war in Ukraine briefly pushed the currency above parity with the euro.
This content was published on
2 minutes
SNB/Reuters/Bloomberg/sb
Español
es
El Banco Nacional Suizo está listo para frenar la subida del franco
The euro/franc exchange rate fell to 0.9910 in Asia overnight. This is the highest level for the franc since January 2015 when the SNB unexpectedly scrapped its cap on the franc’s value against the euro.
“The Swiss franc is currently sought after as a refuge currency, along with the U.S. dollar and the yen,” the SNB said in a statement.
“The Swiss franc continues to be highly valued,” it added. “The SNB remains prepared to intervene in the foreign exchange market if necessary.”
External Content
The increased valuation of the franc is a danger for Switzerland’s export-dominated economy. The European Union is Switzerland’s biggest trading partner. The Alpine nation exported €108 billion ($118 billion) worth of goods to the EU in 2021, mostly chemicals, medical products, machinery, instruments and watches.
In an interview with the Schweiz am Wochenende newspaper on Saturday, SNB Governing Board Member Andrea Maechler said the bank was following the situation in the foreign exchange market very closely and is “ready to intervene if necessary.”
“At the beginning we noticed that the appreciation was rather small compared to the global uncertainties,” Maechler said. “That has changed over the course of the week.”
Maechler said inflation had accelerated in Switzerland, particularly prices for raw material and food, but the SNB expects global inflation to “normalise” and eventually fall over the medium-term.
She said not to expect any reversal of the SNB’s negative interest rates, adding that any decision to do so “will not be decided on the fly”.
The SNB published its annual resultsExternal link on Monday. The central bank reported a profit of CHF26.3 billion ($28.3 billion) for 2021 (2020: CHF20.9 billion). The profit on foreign currency positions amounted to CHF25.7 billion, it said.
Some CHF6 billion of SNB profits will be distributed to the federal government and the cantons.
Swiss climate activists block vehicles near Gotthard tunnel
This content was published on
Around ten climate activists briefly blocked the A2 motorway near the northern entrance of the Gotthard tunnel on Thursday.
Watches belonging to Michael Schumacher up for auction
This content was published on
Schumacher's family is auctioning off eight rare watches from his collection in Geneva. The Christie's auction will take place on Monday.
Joya Marleen and Baschi named best solo acts at Swiss Music Awards
This content was published on
St. Gallen singer Joya Marleen and Baschi from Basel were named artists of the year at the Swiss Music Awards 2024 on Wednesday night.
Swiss authorities announce cost-cutting in asylum sector
This content was published on
The government notably wants to improve integration into the labour force, particularly for people with protection status S.
Various leaders confirm participation at Ukraine peace conference
This content was published on
The presidents of Poland, Finland, and Latvia and the prime ministers of Spain and Belgium will be at the Swiss-hosted talks in mid-June.
This content was published on
In the winter season up to April 2024, railway and cable car operators ferried 3% more visitors compared to the previous winter, and 5% more than the five-year average.
Rhine flooding: Swiss to invest CHF1 billion with Austria
This content was published on
As part of an international agreement with Austria, the Swiss government wants to pump CHF1 billion ($1.1 billion) into flood protection measures along the Rhine over the next three decades.
Swiss government proposes CHF10 million UNRWA donation
This content was published on
After months of debate, Switzerland plans to give CHF10 million ($11 million) to the UN agency this year, rather than the CHF20 million initially foreseen.
Swiss central bank forecasts CHF26bn annual profit
This content was published on
The Swiss National Bank expects to post a profit of CHF26 billion for 2021, made from its growing foreign currency holdings.
Swiss National Bank maintains loose monetary policy
This content was published on
The Swiss National Bank has decided to stick to its expansionary monetary policy and will intervene in the foreign exchange market as necessary.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.