SNB Interventions for Year Already Top $100 Billion

(Bloomberg) -- Switzerland’s central bank spent 11 billion francs ($12.5 billion) on interventions in the third quarter, adding to an already-high tally that got the country labeled a currency manipulator by the U.S.

The Swiss National Bank acquired foreign currencies worth more than 100 billion francs win the first nine months of the year -- the biggest sum since 2012 -- as it fought to counter pandemic-induced haven buying that temporarily pushed the franc to a five-year high against the euro.

The SNB began publishing a quarterly figure for its interventions earlier in 2020 in a bid to head off U.S. criticism of its monetary policy. Still, the Trump administration censured the Swiss for the practice and formally designated them as currency manipulators this month.

SNB officials, however, have said they’ll continue with the policy. They also stress they’re only trying to limit an appreciation of the franc to prevent deflation and not gain an competitive edge for exports.

Quantitative easing as used by the European Central Bank isn’t an option due to the small size of the domestic bond market.

“Switzerland or the Swiss National Bank, we are not currency manipulators,” central bank President Thomas Jordan said in an interview on Dec. 17. “Without these interventions, Switzerland would have gone into an outright deflation.”

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