Trump tariffs and reaction of the Swiss National Bank
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Tension Rises in Currency Markets In the second quarter of 2025, the Swiss National Bank (SNB) found itself compelled to intervene decisively in the foreign exchange markets. The central bank was driven to this move by the increasing pressure on the appreciation of the Swiss franc, triggered by the announcement of new tariffs on U.S. imports by President Donald Trump. According to data published on Tuesday, the SNB purchased 5.06 billion Swiss francs (equivalent to 6.36 billion dollars) in foreign currencies between April and June, marking the highest level of quarterly interventions in the past three years. The Swiss franc, a safe haven in times of uncertainty The announcement of tariffs by Trump has generated significant uncertainty in global financial markets. In particular, the Swiss franc rose by 7% against the US dollar and by 2.2% against the euro in the month of April alone. This movement has been attributed by market operators to inflows into the franc, traditionally considered a safe haven asset during periods of financial and geopolitical turbulence. According to Karsten Junius, economist at J.Safra Sarasin, “most likely the SNB intervened to mitigate forex volatility after U.S. President Trump announced his reciprocal tariffs in April. These significantly increased political uncertainty and market volatility and may have led to inflows into the franc.” The SNB Strategy: Interventions for Price Stability The Swiss National Bank’s primary objective is price stability, defined as an annual inflation rate between 0 and 2%. A strong appreciation of the franc risks compromising this objective, making imports more affordable and thus lowering pressure on domestic prices. For this reason, the SNB intervenes by purchasing foreign currencies and injecting francs into the market, in an attempt to curb the rise of the national currency. In the second quarter, the activity of the SNB in the…
Filed under: News - @ September 30, 2025 8:29 pm