Swiss National Bank Increases Forex Sales In The Q3

(Reuters) - Zurich The Swiss National Bank boosted its FX sales to 739 million Swiss francs ($799.35 million) in the third quarter of 2022, the central bank said on Friday, demonstrating how its priority has shifted from limiting the strength of the safe-haven currency to combating inflation.

The sum represented an increase from the 5 million francs of foreign currency sold by the SNB in the second quarter of 2022, and it maintains the SNB's new strategy after purchasing 353 billion francs of forex since 2015.

Instead, the SNB has lately sold foreign currencies in order to boost the Swiss franc, whose high value has helped to curb inflation induced by higher import prices.

In November, Swiss inflation was 3%, which was modest in contrast to other nations but high by Swiss standards and much over the SNB's target of 0-2%.

Earlier this month, SNB Chairman Thomas Jordan said that the central bank has sold foreign currency in recent months to guarantee “proper monetary circumstances.”

He said that the bank will sell foreign currencies in the future and that the SNB would purchase foreign currencies again if required to prevent the franc from over appreciating.

Credit Suisse analyst Maxime Botteron predicted that the SNB will continue to sell foreign currencies in the fourth quarter, predicting that the central bank sold 13.3 billion francs in October alone.

“I anticipate FX sales to continue if Swiss inflation is over the goal. Mr. Jordan has said that there is no objective for them to boost the franc as well, but the interventions are designed to keep the franc from falling too much as this helps against imported inflation,” Botteron added.

“Foreign currency sales undoubtedly surged during the fourth quarter also, when the SNB boosted its interest rates in September. Previously, FX transactions were not required since the CHF gained strongly throughout the summer,” he said.

$1 equals 0.9245 Swiss francs

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