Monetary policy SNB buys foreign currency worth CHF 0.1 billion in the second quarter

The Swiss National Bank (SNB) once again purchased foreign currency in the second quarter of 2024. From April to June, the central bank purchased the equivalent of CHF 103 million worth of foreign currency, according to SNB statistics published on Monday.

In the previous quarter, the SNB had purchased foreign currency worth CHF 281 million - the first time it had done so since mid-2022. Prior to this, the SNB had acted as a seller on a large scale - in order to strengthen the franc and thus keep imported inflation low.

In the final quarter of 2023, for example, foreign currencies amounting to CHF 22.7 billion were sold. In 2023 as a whole, foreign currency sales amounted to just under CHF 133 billion.

Before mid-2022, the SNB had again bought large quantities of foreign currency in some cases to prevent the Swiss franc from appreciating too much. Around 2020, foreign currencies were purchased for just under CHF 110 billion. Alongside interest rate policy, foreign currency purchases and sales are the SNB's most important instrument for its monetary policy.

Just last Thursday, the central bank decided to cut interest rates by a further 25 percentage points to 1.00 percent. Further interest rate cuts may be necessary in the coming quarters, it said. At the same time, however, the SNB is still prepared to be active on the foreign exchange market if necessary, it added.

SDA