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.
Popular Stories
More
Swiss Abroad
Aussie adoptee gains Swiss citizenship at 54 thanks to old envelope
Swiss President Karin Keller-Sutter makes official visit to Austria
This content was published on
Karin Keller-Sutter, who took over the rotating Swiss presidency this year, has made her first official visit abroad as president to Austria.
This content was published on
The boss of Swiss Post, Roberto Cirillo, is stepping down at the end of March after six years in the job, the company announced on Friday.
This content was published on
The name and logo of the former Credit Suisse headquarters at Paradeplatz 8 in Zurich's financial centre were officially replaced by those of UBS on Friday.
Outgoing Swiss federal police chief warns of insufficient resources
This content was published on
The outgoing director of the Federal Office of Police (Fedpol), Nicoletta della Valle, has warned that officers, prosecutors and investigators in Switzerland have insufficient resources to do their work.
Swiss university inaugurates Europe’s most powerful centrifuge
This content was published on
The federal technology institute ETH Zurich has inaugurated Europe's most powerful geotechnical centrifuge. Researchers use the instrument to simulate the effects of natural hazards.
Swiss film industry reports successful year in 2024
This content was published on
Swiss films did well in cinemas in 2024, recording over 907,000 admissions, the Federal Statistical Office (FSO) reports. They accounted for almost 9% of all films shown last year in Switzerland.
Glencore and Rio Tinto held talks on mining’s biggest-ever potential merger, say reports
This content was published on
The Swiss-based mining and commodities group Glencore and the British company Rio Tinto reportedly held early-stage talks last year about combining their businesses.
First municipalities begin Swiss-wide plastic packaging recycling scheme
This content was published on
A new collection system to recycle plastic packaging and drinks cartons has begun in a handful of Swiss municipalities - others should follow in the coming weeks.
This content was published on
Despite an ongoing restructuring programme, Swiss retail giant Migros continued to grow last year by 1.6%, posting record sales of CHF32.5 billion ($35.7 billion).
Swiss researchers warn ‘mega-droughts’ are spreading around the world
This content was published on
"Mega-droughts" are increasing worldwide - becoming more frequent, hotter and more widespread over the past 40 years, a study published on Thursday shows.
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.