Swiss Central Bank Rejects Currency Manipulation Charge
Switzerland's central bank on Wednesday flatly rejected accusations from the United States that the wealthy Alpine nation was involved in currency manipulation.
"In no case does Switzerland manipulate currency," the Swiss National Bank (SNB) said in an email statement sent to AFP.
The comment came after the U.S. Treasury found in its semi-annual foreign exchange report that Switzerland, along with Vietnam, was intervening in currency markets to affect its balance of payments.
In the case of Vietnam, the report also found the currency manipulation was aimed at "gaining unfair competitive advantage in international trade."
The SNB said it was aware of the report, and that it and Swiss authorities were in contact with their U.S. counterparts "to explain the economic situation and monetary policy of our country."
The bank stressed that its interventions on foreign exchange markets were in no way aimed at affecting the balance of payments, nor to gain unfair competitive advantage for the Swiss economy.
"Swiss monetary policy needs these interventions to guarantee appropriate monetary conditions and thus price stability in Switzerland," it said.
The Swiss franc has long been considered a safe haven currency, meaning investors scurry to buy it in times of crisis, pushing up its value.
The central bank tends to intervene to avoid an over-valuation of the franc, which penalizes the Swiss economy by making its exports more expensive.
The U.S. Treasury report follows years of railing by President Donald Trump against countries that have trade surpluses with the United States.
He has accused many of them of using a weaker currency to sell their goods more cheaply at the expense of U.S. producers.
Treasury reviewed 20 major U.S. trading partners with bilateral goods trade with the United States of at least $40 billion annually.
The criteria to be labelled a currency manipulator are a large trade surplus with the United States, a significant current account surplus, and evidence of "persistent, one-sided intervention" in foreign exchange markets.
The findings in the report do not entail sanctions, but trigger "enhanced bilateral engagement" with each country to urge "development of a plan... to address the underlying causes of currency undervaluation and external imbalances."
The Swiss central bank stressed that the U.S. report "will not lead to any change in SNB's approach to monetary policy."
"In light of the economic situation and the consistently high value of the franc, the SNB remains positioned to increasingly intervene in the foreign exchange market," it said.
Source: Agence France Presse
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