Swiss National Bank has purchased 120 billion dollars worth of foreign currency since the epidemic began to effect financial markets and additional 3.1 billion dollars in the third quarter of 2021.
The Swiss National Bank (SNB) purchased $3.1 billion in foreign exchange in the third quarter before the Swiss franc overvalued against the euro. While the US dollar has fallen in value against other currencies this year due to the coronavirus outbreak, investor interest in the franc has surged.
A member of the SNB governing board, Andréa Maechler stated that “Had we not intervened, the franc would have appreciated significantly more, and this would have placed an additional burden on our economy in an already exceptionally challenging environment.”
Since September, the Swiss franc has continued to rise against the euro. On the other hand, The Swiss National Bank is concerned about the currency’s overvaluation. While the SNB considered the currency to be very overvalued in 2017, it has only recently settled for the term “very valuable.”
The Swiss National Bank effectively uses negative interest policy and market interventions to keep the currency from overvaluing. SNB Chairman Thomas Jordan and other policymakers have stated that they will continue to purchase negative interest rates and foreign currency as needed.
Since the epidemic began to affect the markets, the Swiss National Bank has purchased 110 billion francs ($120 billion) in foreign currency. Because of these foreign exchange purchases, the United States designated Switzerland as a currency manipulator.