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Swiss central bank resumes foreign currency buying spree

The Swiss National Bank (SNB) continued to buy foreign currencies in the fourth quarter of last year.

SNB: foreign exchange purchases continued in the fourth quarter
SNB: foreign exchange purchases continued in the fourth quarter Keystone-SDA

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Between October and December, the central bank bought the equivalent of CHF103 million, statistics published today show. For 2024 as a whole, the figure is CHF1.2 billion.

SNB officials were particularly active in the third quarter, when the figure reached CHF728 million.

In 2024, the bank now headed by Martin Schlegel had returned to buying foreign currency for the first time since mid-2022. Previously, the SNB had acted as a large-scale seller in order to keep the franc high and thus reduce imported inflation.

In 2023 as a whole, sales had amounted to CHF133 billion. It is striking, however, that the scale of transactions in 2024 is also much smaller: they are largely measured in millions, compared to billions in the previous 12 months.

Transactions with foreign currencies are, alongside the setting of interest rates, the main instrument of monetary policy practised by the central bank.

Ten days ago, on March 20, the SNB decided to reduce the key rate by a further 0.25 percentage points to 0.25%. At the same time, the SNB also reiterated its readiness to intervene in the foreign exchange market, should this be deemed necessary.

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Translated from French by DeepL/mga

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