economy
Switzerland risks the ire of the White House as it flags potential currency intervention
The Swiss National Bank said Thursday that it is growing increasingly willing to intervene in foreign exchange markets.
TL;DR
- The Swiss National Bank (SNB) is more willing to intervene in the foreign exchange market to counter rapid and excessive appreciation of the Swiss franc.
- A strong franc can jeopardize price stability in Switzerland and threaten the country's exports, with inflation currently at 0.1%.
- The SNB's potential intervention strategy could lead to another dispute with the White House, as the U.S. has previously accused Switzerland of currency manipulation.
- Swiss officials maintain that interventions are purely for monetary policy reasons to ensure price stability, not to provide an unfair advantage to exporters.
- Analysts suggest that the SNB may have already intervened since mid-March to curb franc appreciation, and could continue with "carefully chosen bouts of CHF selling intervention."