Swiss respond to removal from US currency manipulation list

The SNB said it remained in contact with the US authorities to explain Switzerland’s economic situation and monetary policy © Keystone / Peter Schneider

The Swiss National Bank (SNB) has responded to the US Treasury removing Switzerland from its monitoring list of countries that appeared to be manipulating their currencies.

The SNB said it noted the decision, which came in the Treasury’s semi-annual report into the currency policies of the United States’ major trading partners.

“Together with the Swiss authorities, the SNB remains in contact with the US authorities to explain Switzerland’s economic situation and monetary policy,” the SNB said in a statement on Wednesday. “We welcome these ongoing discussions.”

+ Is Switzerland a currency manipulator?

Switzerland had run into trouble with the US after the SNB’s massive purchase of foreign currencies, designed to weaken the safe haven franc as it surged in value.

The SNB has since changed course, allowing the franc to weaken as a tool to dampen imported inflation.

In its November 2022 report, the Treasury had found that Switzerland had exceeded all three thresholds for possible manipulation, but refrained from branding it as a manipulator. But in June, the Treasury downgraded its view of Switzerland, ending “enhanced analysis” of the country.

Three criteria

On Wednesday, Switzerland and South Korea were taken off the monitoring list after meeting one criterion for two periods in a row.

For a country to qualify, it had to exceed two of three thresholds: a trade surplus with the US above $15 billion (CHF13.5 billion), a high global current account surplus above 3% of gross domestic product (GDP), and persistent net foreign currency purchases exceeding 2% of GDP over a year.

The designation had sparked intensive discussions between Swiss and US officials, with Switzerland explaining its policies were not designed to gain a trade advantage but rather to reduce the damaging impact of the strong Swiss franc on Switzerland’s export-orientated economy.

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