SNB sold CHF 132.9 bn in net foreign exchange in 2023
Published: Tuesday, Mar 19th 2024, 09:00
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The Swiss National Bank (SNB) was once again active on the foreign exchange markets on a large scale last year. It was significantly more active in the first three quarters than in the final quarter.
In 2023 as a whole, it sold the equivalent of CHF 132.9 billion in net foreign currencies, according to the annual report published on Tuesday. At 110.2 billion, the majority of sales took place in the first three quarters; in the fourth quarter, the figure was significantly lower at 22.7 billion.
From July to September 2023, the central bank sold the equivalent of CHF 37.6 billion worth of foreign currency, compared with CHF 40.3 billion in the second quarter and CHF 32.3 billion in the first quarter.
As inflation continued to weaken over the course of 2023, foreign currency sales were then lower in the fourth quarter. The significant nominal and, towards the end of the year, real appreciation of the Swiss franc made further interventions superfluous. In fact, the SNB stated at the monetary policy assessment last December that currency sales were no longer a priority in its foreign exchange market activities.
Wait-and-see attitude expected for situation assessment
Sales of foreign currencies at the SNB were part of monetary policy - alongside interest rate policy - from mid-2022 in particular. The SNB used this instrument to combat inflation, as foreign currency sales tend to lead to a stronger franc and falling import prices.
In previous years, the SNB had used large foreign currency purchases to combat the sharp rise in the Swiss franc following the discontinuation of the minimum euro exchange rate. In 2020, for example, the SNB purchased foreign currency to the value of almost CHF 110 million.
The SNB's next interest rate decision is due next Thursday: Economists generally assume that the SNB will leave the key interest rate at 1.75 percent. Experts agree that the members of the Governing Board have no need to act in view of the current situation.
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