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September 30, 2025
Swiss National Bank Currency:
The Swiss National Bank boosted its foreign currency purchases in the second quarter. The move came after Donald Trump announced new tariffs on U.S. imports in April, which put upward pressure on the franc.
From April to June, the bank bought 5.06 billion francs ($6.36 billion) in foreign currencies. It was the biggest quarterly intervention in more than three years.
The SNB did not provide any comment.
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Investors Flock to Safe Havens
In April, the Swiss franc soared 7% against the U.S. dollar. It also rose 2.2% versus the euro.
Traders attributed the gains to increased inflows into the franc amid uncertainty over U.S. tariff policies. The dollar weakened, while safe-haven currencies strengthened.
“After President Trump announced reciprocal tariffs in April, the SNB probably intervened to calm currency market swings,” said Karsten Junius, an economist at J. Safra Sarasin.
“Rising political uncertainty and market swings likely pushed investors toward the franc,” analysts said.
The SNB buys foreign currencies to relieve upward pressure on the franc. Supplying the market with francs helps keep exchange rates in check.
A rapid rise in the franc can interfere with the SNB’s price stability goal. Annual inflation of 0–2% could be affected as imports become cheaper.
SNB forex activity jumped in the second quarter. This is a sharp contrast to just 1.26 billion francs purchased over the prior five quarters.
SNB Grapples with Difficult Choices
Last week, SNB Chairman Martin Schlegel said the bank would use every tool at its disposal to meet its inflation goals. Currency interventions would be included if necessary.
On Monday, the SNB and the U.S. Treasury clarified that they do not adjust exchange rates for competitive gain.
This came after Washington added Switzerland to a watchlist in June for possible unfair currency and trade practices.
Charlotte de Montpellier, an economist at ING Bank, said the SNB’s stance is unlikely to change. She expects the central bank will continue using currency interventions when needed.
“The SNB faces two tough choices. It can increase forex interventions, risking criticism from the U.S., or lower interest rates below zero, which it wants to avoid,” she said.
At the time, $1 was equivalent to 0.7957 Swiss francs.
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