USA finds no currency manipulation – keep in touch with Switzerland

USA finds no currency manipulation – keep in touch with Switzerland

Swiss National Bank (SNB)

For years, the SNB had been using foreign currency purchases to combat an excessive appreciation of the franc, which was in demand as a safe haven in times of crisis.

(Photo: Reuters)

Washington The US has moved away from its concerns about Swiss monetary policy. The US Treasury Department said Thursday that as of June 2022, no major trading partner of the United States had manipulated its exchange rates to gain an unfair competitive advantage. At the same time, the semi-annual report said the Ministry of Finance would remain in close contact with Switzerland regarding its currency practices. Switzerland was last on the US “watch list”.

For years, the Swiss National Bank (SNB) had been using foreign currency purchases to resist an excessive appreciation of the franc, which was in demand as a safe haven in times of crisis. In view of rising inflation, the central bank made a turn in its monetary policy in June and left the era of negative interest rates behind in September. A certain franc appreciation is tolerated as a dampening effect on inflation.

The US Treasury Department report said most interventions were aimed at strengthening currencies, not weakening them. At the same time, it was acknowledged that emerging and developing economies may need a range of approaches – including interventions – to respond to current global economic conditions.

A senior Treasury Department official told reporters that the dollar’s strength against other currencies could begin to weaken as the Federal Reserve’s monetary tightening peaks and other central banks catch up.

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More: SNB boss Jordan wants to ensure price stability through “decisive action”.

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