The Swiss National Bank paid 5.74 billion Swiss francs ($6.01 billion) on foreign currencies in the first quarter of 2022, the bank said on Thursday, reducing its operations to limit the safe-haven franc's strength compared to the previous quarter.
The sum was lower than the 12.63 billion francs spent by the SNB between October and December, but more than the 296 million francs spent in the first quarter of 2021.
The Swiss franc temporarily surpassed parity against the euro in early 2022, as the reemergence of COVID-19 in China and the war in Ukraine drove investors to seek safe havens.
For years, foreign currency purchases have been a cornerstone of SNB strategy to halt the franc's gain, which has made life difficult for Swiss exporters by making their products more expensive abroad.
However, the SNB stated last month that, despite its high nominal value, the franc was no longer highly appreciated due to increased inflation in other nations.
To combat growing inflation in Switzerland, the SNB has shifted its focus to boosting interest rates, lifting its policy rate for the first time in 15 years.
The euro was trading at approximately 0.9970 francs on Thursday.
According to analysts, the SNB appears to be accepting the franc's greater value and is deferring involvement for the time being.
Still, the SNB has warned that it may engage in the currency market, saying this month that it would intervene to prevent a "excessive appreciation" of the franc and would consider selling foreign currency if the franc fell.
(Source:www.nasdaq.com)
The sum was lower than the 12.63 billion francs spent by the SNB between October and December, but more than the 296 million francs spent in the first quarter of 2021.
The Swiss franc temporarily surpassed parity against the euro in early 2022, as the reemergence of COVID-19 in China and the war in Ukraine drove investors to seek safe havens.
For years, foreign currency purchases have been a cornerstone of SNB strategy to halt the franc's gain, which has made life difficult for Swiss exporters by making their products more expensive abroad.
However, the SNB stated last month that, despite its high nominal value, the franc was no longer highly appreciated due to increased inflation in other nations.
To combat growing inflation in Switzerland, the SNB has shifted its focus to boosting interest rates, lifting its policy rate for the first time in 15 years.
The euro was trading at approximately 0.9970 francs on Thursday.
According to analysts, the SNB appears to be accepting the franc's greater value and is deferring involvement for the time being.
Still, the SNB has warned that it may engage in the currency market, saying this month that it would intervene to prevent a "excessive appreciation" of the franc and would consider selling foreign currency if the franc fell.
(Source:www.nasdaq.com)
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