SNB pares back forex sales in fourth quarter as inflation cools
Reuters
Published Mar 28, 2024 08:12
Updated Mar 28, 2024 08:36
ZURICH (Reuters) -The Swiss National Bank (SNB) sold 22.7 billion Swiss francs ($25 billion) worth of foreign currencies in the fourth quarter, it said on Thursday, as the central bank pared back its policy of seeking to curb inflation by boosting the franc.
The amount was a sharp decrease from the 37.6 billion francs in forex sold by the SNB in the July to September period.
The SNB, which last week cut its benchmark interest rate for the first time in nine years, has been selling off foreign currencies to bolster the franc's value in a bid to dampen inflation. A stronger franc makes imported goods cheaper.
The strategy has paid dividends, with inflation in Switzerland coming within the SNB's 0-2% target range for nine months running, and the bank declaring last week that its fight against inflation had been "effective."
The sale of foreign currencies was the lowest amount the SNB had sold since the third quarter of 2022, its data showed.
UBS economist Maxime Botteron said that for now, the focus was more on the SNB's policy rate.
"However, a sharp move of the exchange rate in either direction could trigger foreign currency sales or purchases, depending on whether the Swiss franc depreciates or appreciates," Botteron said.
($1 = 0.9057 Swiss francs)
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Written By: Reuters
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