© Reuters. FILE PHOTO: The logo of the Swiss National Bank (SNB) is printed on its building in Bern, Switzerland June 16, 2022. REUTERS/Arnd Wiegmann/File Photo
ZURICH (Reuters) – The Swiss National Bank increased foreign exchange sales to 739 million Swiss francs ($799.35 million) in the third quarter of 2022, the central bank said on Friday, showing significant Their focus has shifted from deriving from how safe-haven currencies are to fight inflation.
This figure is an acceleration from the 5 million francs of foreign currency that the SNB sold in Q2 2022 and continues a changed approach after buying 353 billion francs of foreign currency since 2015.
Instead, the SNB recently sold foreign currency to underpin the Swiss franc, a high-value currency that has helped reduce inflation caused by more expensive imports.
Switzerland’s inflation in November was at 3%, low compared to other countries, but high compared to Switzerland and outside the SNB’s 0-2% inflation target.
SNB President Thomas Jordan said earlier this month the central bank had been selling foreign currency in recent months to ensure “appropriate monetary conditions”.
He said the bank will also sell foreign currency in the future, while the SNB is also ready to buy back foreign currency if necessary to check the excessive appreciation of the franc.
Credit Suisse economist Maxime Botteron said he expected the SNB to continue selling foreign currency in the fourth quarter, estimating the central bank sold 13.3 billion francs of the currency in October alone.
“I expect foreign exchange sales to continue if Swiss inflation is above target. Mr. Jordan has said that they have no objective to increase the franc, but interventions are intended to prevent the franc from weakening. too weak because this helps fight import inflation,” Botteron said.
“Foreign currency sales may also increase in the fourth quarter, after the SNB raised interest rates in September. Before that, foreign currency sales were not necessary because of the strong appreciation of CHF in the summer,” he said.
($1 = 0.9245 Swiss francs)