Catherine Bosley, 22 March 2021
The Swiss National Bank spent 110 billion francs ($118 billion) on interventions in 2020, evidence of heightened market activism that risks fueling more tension with the U.S.
The tally is the highest since 2012 and indicates officials purchased currency worth 9 billion francs in the fourth quarter, when the U.S. Treasury branded Switzerland a currency manipulator. Such eye-watering sums won’t escape the attention of President Joe Biden’s new administration in Washington, which doesn’t appear to be breaking with the stance of its predecessor.n
That raises the prospect of the standoff with Switzerland over currencies continuing. SNB President Thomas Jordan remains steadfast in his willingness to intervene, and is likely to reiterate that view after a quarterly monetary decision later this week.
“The Biden people are going to be tough and vigilant,” said Mark Sobel, a former career Treasury official now U.S. Chairman of the Official Monetary and Financial Institutions Forum. “I think they will continue the Trump administration’s approach to pushing countries to be more transparent about their foreign exchange practices and interventions.”
The change of leadership since the exit of President Donald Trump had fueled hopes of a shift in the U.S. stance, but that might not come to pass. Both Treasury Secretary Janet Yellen and her foreign affairs counterpart Antony Blinken have vowed to oppose manipulation. The 2020 Democratic Party party platform also contained a commitment.