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SNB sold $24bln in foreign currencies during 2022 in intervention U-turn

Published 03/21/2023, 02:52 AM
Updated 03/21/2023, 02:55 AM
© Reuters. FILE PHOTO: Swiss National Bank (SNB) headquarters are seen in Zurich, Switzerland March 16, 2023. REUTERS/Denis Balibouse

ZURICH (Reuters) -The Swiss National Bank sold 22.3 billion Swiss francs ($23.97 billion) worth of foreign currencies interventions last year, the central bank said in its annual report published on Tuesday, a reversal from the 21.1 billion francs bought in 2021.

The SNB has said it is prepared to buy and sell foreign currencies as it pursues its goal of dampening Swiss inflation, which at 2.8% in 2022 was outside its target range of 0-2%.

The SNB has regularly confirmed its commitment foreign currency interventions but until last year this mainly meant buying buy foreign currencies with newly created francs to stem the rise of the Swiss franc.

But the central bank changed tack in 2022 and allowed the safe-haven currency to appreciate.

"This counteracted a rise in the price of imported goods and services and thus reduced inflationary pressure," the SNB said on Tuesday.

From June onwards, the central bank also signalled its willingness to sell foreign currencies if the franc was to weaken, a move designed to further insulate Switzerland from imported inflation.

In contrast to the 22.3 billion francs in forex sold last year, the SNB bought 21.1 billion francs worth in 2021, and 110 billion francs worth in 2020.

© Reuters. FILE PHOTO: Swiss National Bank (SNB) headquarters are seen in Zurich, Switzerland March 16, 2023. REUTERS/Denis Balibouse

The SNB is due to give its next update on monetary policy on Thursday.

($1 = 0.9304 Swiss francs)

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