The Swiss National Bank (SNB) has pushed back against accusations of currency manipulation following its addition to a U.S. Treasury Department watch list monitoring countries for potentially unfair trade and currency practices. In response to the report released Thursday, the SNB issued a statement on Friday, denying any deliberate interference aimed at distorting trade balances or boosting economic competitiveness through manipulation of the Swiss franc.
“The SNB does not engage in any manipulation of the Swiss franc,” the bank emphasized. “It does not seek to prevent adjustments in the balance of trade or to gain unfair competitive advantages for the Swiss economy.” Despite the listing, the SNB said it would continue to intervene in foreign exchange markets and adjust interest rates when necessary to maintain price stability, particularly in light of recent economic developments.
The Swiss central bank reiterated its inflation target range of 0-2%, a goal it has struggled to meet as consumer prices fell by 0.1% in May, marking the lowest inflation rate in four years. The SNB said its actions are solely focused on domestic economic needs, and it is maintaining dialogue with U.S. authorities to clarify its monetary policy stance.
Economic Context: Minimal Forex Intervention, Falling Inflation
The SNB’s defense comes against the backdrop of a strong Swiss franc, which has been one of the contributing factors to negative inflation. The U.S. Treasury’s report cited Switzerland as meeting two of its three criteria for enhanced scrutiny, significant trade surpluses and a large current account surplus, but not for excessive foreign exchange interventions, which is the third metric for being labeled a manipulator.
In 2024, the SNB’s foreign exchange purchases totaled only $1 billion, equivalent to just 0.1% of Switzerland’s GDP, significantly below the 2% threshold outlined by the U.S. Treasury. The Treasury itself noted the scale of Switzerland’s currency interventions in 2024 had been “minimal.”
Economists have pointed out that the Swiss National Bank has maintained a transparent and targeted approach to monetary policy, largely influenced by internal inflationary pressures rather than any intent to influence international trade. According to GianLuigi Mandruzzato, an economist at EFG Bank, “The SNB will be mindful of the Treasury report, but it will remain committed to its core mandate.”
Diplomatic and Economic Implications Going Forward
Although the Swiss National Bank has confirmed it is engaging with U.S. counterparts, it declined to comment on whether any further talks are scheduled. Officials reaffirmed that Switzerland’s monetary policy will continue to be driven by national priorities, especially given the importance of price stability in the current economic climate.
While the U.S. Treasury’s watch list does not carry direct penalties, it can open the door to increased scrutiny or pressure, especially under future U.S. administrations. Mandruzzato cautioned that “with the Trump administration, anything can happen,” referencing the unpredictable nature of U.S. policy responses in past years.
In the meantime, the Swiss National Bank signaled it would stay the course, emphasizing that all its monetary interventions are proportional and transparent, aimed solely at preserving Switzerland’s economic stability.
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