The Swiss National Bank announced on Tuesday that it had sold foreign currency in 2023 for a total of 132.9 billion Swiss francs ($149.51 billion), demonstrating the bank’s growing emphasis on bolstering the Swiss franc as a hedge against inflation from imports.
Laptops 1000The SNB’s approach has been successful; in the past nine months, Swiss inflation has been within its target range of 0-2%.
When the SNB began selling off some of its enormous foreign currency assets in 2022, the amount represented a substantial rise. At that time, the bank had sold 22.3 billion francs in foreign currencies.
“The SNB’s foreign currency sales contributed to the Swiss franc initially appreciating roughly in line with inflation differentials against other countries,” the Swiss National Bank stated on Tuesday.
“In doing so, they prevented a weakening of the Swiss franc in real terms and thus helped in tightening monetary conditions,” it stated. “Towards the end of the year, the inflation rate fell significantly.”
The SNB declared that once it had reached its objective, it would stop concentrating on foreign exchange sales. On Thursday, the central bank is expected to make its next monetary policy announcement.
