D.According to insiders, Switzerland should meet the criteria for being classified by the United States as a currency manipulator in the future. According to several people familiar with the matter, the country is likely to be listed in a report by the US Treasury Department expected in the coming weeks. Although uncomfortable for Switzerland, the publication of the report does not automatically trigger sanctions or tariffs.
The Swiss National Bank (SNB) intervened heavily on the foreign exchange market this year in order to prevent an appreciation of the Swiss franc, which is in demand as a safe haven in times of crisis and which would affect the local economy. In the first half of the year, the Swiss monetary authorities spent 90 billion francs or more than the 2 percent of gross domestic product that the United States accepts without accusing a country of currency manipulation.
With a bilateral import surplus of more than $ 20 billion and a current account surplus of more than 2 percent, Switzerland also fulfills the other two criteria applied by the United States. The SNB declined to comment, and there was no direct comment from the US Treasury Department.
Switzerland has already countered the American allegations. After all, the Alpine republic was put on the watch list by the Ministry of Finance a year ago. According to Swiss Leesart, the central bank’s interventions in the foreign exchange market are purely monetary policy motivated and therefore did not serve to gain trading advantages. Rather, they aimed to avert negative consequences for price stability and the economy from an overvalued franc.
For almost six years now, the SNB has been fighting against an appreciation of the Swiss franc with record-low negative interest rates and foreign exchange market interventions. Between 2011 and 2015 it had set an official upper limit for the revaluation, but then gave it up.