The Swiss National Bank (SNB), the central bank of Switzerland, on Wednesday rejected the U.S. Treasury’s accusations of currency manipulation, saying it would remain willing to “intervene more strongly in the foreign exchange market.”
“The SNB has taken note of the U.S. Treasury Department’s latest report on the foreign exchange policies of major trading partners of the United States (and its assessment of Switzerland),” the SNB said in an emailed statement to Xinhua.
“Together with the Swiss authorities, the SNB is in contact with the U.S. authorities to explain Switzerland’s economic situation and monetary policy.”
Earlier on Wednesday, the U.S. Treasury Department had tagged Switzerland as a currency manipulator, suspecting the country of taking measures to devalue the Swiss currency against the greenback.
“Switzerland does not engage in any form of currency manipulation,” the SNB said. “The SNB’s interventions in the foreign exchange market do not serve the purpose of preventing balance of payments adjustments or gaining unfair competitive advantages for the Swiss economy.”
“Foreign exchange market interventions are necessary in Switzerland’s monetary policy to ensure appropriate monetary conditions and therefore price stability,” it added.
The SNB has been stepping up its interventions in the forex market in the first half of this year, spending around 90 billion Swiss francs (or 101.7 billion U.S. dollars) in a bid to rein in the highly valued franc and lessen the impact of the coronavirus pandemic on the economy.
It came as the rush for safe haven currencies during the COVID-19 crisis pushed the franc to its strongest level in five years against the euro.
The SNB said its monetary policy approach would remain unchanged by the U.S. report. “In light of the economic situation and the fact that the Swiss franc is still highly valued, the SNB remains willing to intervene more strongly in the foreign exchange market.”
“Switzerland and the U.S. are important economic partners. They enjoy excellent bilateral relations and are in regular contact regarding financial and economic matters,” the statement added.
The SNB will give its monetary policy assessment on Thursday when it is expected to reiterate its commitment to negative interest rates and currency market interventions.
At its last monetary policy meeting in September, the central bank kept its interest rate and the interest rate it charges on sight deposits locked at minus 0.75 percent.