Swiss central bank chief rejects US currency manipulator label

Swiss central bank chief rejects US currency manipulator label

Thomas Jordan, president of the Swiss National Bank (SNB), stopped during the Swiss International Finance Forum in Bern, Switzerland.

Matthew Lloyd | Getty Images

LONDON – Swiss National Bank President Thomas Jordan has rejected a US decision to label Switzerland as “currency manipulation”.

U.S. The Treasury on Wednesday added the Swiss nations to its list of nations, fearing they would deliberately devalue their currencies. Dollars.

Jordan appeared on CNBC on Thursday. Told that SNB. Nor is it artificially manipulated in Switzerland Swiss Franc.

“Our monetary policy is necessary, it is legitimate, and we have a very low rate of inflation – it is still negative at the moment – so we have to fight this deflation, and the Swiss franc is very strong, so it was appreciated in a small way “In the last 12 years, in terms of the euro and on both sides of the US dollar,” he said.

The Swiss National Bank has long said it is ready to intervene more strongly in foreign exchange markets, and has strongly refused to manipulate the Swiss franc. U.S. The Treasury said Switzerland’s intervention was 14% of GDP.

To be labeled as a manipulator, countries have to use the U.S. With a bilateral trade surplus of more than 20 20 billion, foreign exchange intervention is more than 2% of GDP and the global current account surplus is more than 2% of GDP.

Treasury Secretary Steven Munuchin said his department has taken a strong step to “save economic growth and opportunity for American workers and industries.”

President-elect Joe Biden’s choice for Treasury Secretary, Janet Yellen, could reconsider those findings when she delivers her first currency report, expected in April.

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Addressing the imminent change of administration, Jordan said the SNB hopes to have an “intensive and constructive dialogue” with the Biden team.

He said, “We will try to explain the specific situation of Switzerland with these criteria, and we will explain again why these criteria do not come to the correct conclusion regarding Switzerland, and we can show that we are not manipulating the currency.” .

Earlier on Thursday, the SNB maintained its monetary policy stance, keeping interest rates low at -0.75% and adopting a cautious stance. The bank said a second wave of Kovid-19 infection is likely to make sense in the weaker fourth quarter of 2020 and the first quarter of 2021, noting that “manufacturing factors will still be useful for some time to come.”

‘Teaching Storm’

David Oxley, a senior European economist at Capital Economics, suggested in a note on Thursday that Switzerland would be able to dial back its intervention in foreign exchange markets next year.

“Nevertheless, this is because we expect an improvement in the sense of risk, not because of the actions of the US Treasury, but to ease the pressure on the euro against the euro.”

“The big picture is that Switzerland has always been a special case when it comes to exchange rate policy, and the US Treasury has in the past acknowledged that Switzerland’s economic situation is ‘special’ and that its monetary policy options are limited by its domestic A small stock of wealth. “

Since the forthcoming Biden administration is expected to be less hostile to its approach to trade and international relations, Ox Ksle suggested that the issue could prove to be a “teaching storm.”

On Thursday, Carl Weinberg, chief economist at High Frequency Economics, disagreed with the Treasury feature and suggested it could be transient.

“I certainly don’t understand how declaring Switzerland a currency counterfeiter promotes the interests of the United States, or does anything better for anyone doing business, and of course, taking the currency counterfeiting label has no consequence, so this current Treasury That’s what the secretary is doing, and in a few months there’s going to be a new Treasury secretary, “Weinberg told CNBC’s Squawk Square Europe.

He suggested that the incoming administration would focus more on “trying to make friends around the world rather than establishing hostile relations.”


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