The Swiss franc's surge, driven by tariff turmoil, has intensified pressure on the Swiss National Bank (SNB) to intervene, as reported by Reuters. The currency has appreciated by about 9% against the dollar in April, marking its strongest monthly gain since the 2008 financial crisis. The SNB faces challenges with its 0-2% inflation target, as the franc's strength could depress import costs at a time when inflation is already near zero. Switzerland's president has been actively engaging with Trump administration officials in Washington to address the dual challenges of tariffs and a strengthening currency, which are impacting the country's competitiveness. The Swiss economy is particularly vulnerable to the 31% U.S. tariffs on its exports. Following these discussions, the Swiss president announced that the U.S. is seeking a solution with Switzerland, indicating a willingness to negotiate on tariff issues. This has led to an agreement to enter into tariff negotiations with the Trump administration. SNB Chairman Schlegel has warned that an economic slowdown in Switzerland cannot be ruled out due to the ongoing trade conflict, emphasizing the importance of maintaining price stability amidst the uncertainty caused by U.S. tariffs. The SNB's key rate stands at 0.25%, and it has previously bought 1.2 billion francs and sold foreign currencies worth nearly 133 billion francs. With 57% of Swiss imports invoiced in euros and 13% in dollars, the franc's value against the euro is a significant concern for policymakers.
Ελβετία: Σε διαπραγματεύσεις με την κυβέρνηση Τραμπ για τους δασμούς #capitalgr https://t.co/Zj750yqJMH https://t.co/rmlkCRPIzj
Swiss National Bank warns of economic fallout from trade conflict https://t.co/72RENQ6a9H via @Reuters https://t.co/TKJ9rIZFLJ
The risks of global trade wars and their likely negative impact on the European economy may force Czech policymakers to cut borrowing costs more than they planned, according to the head of Moneta Bank https://t.co/KVtHvF7k1J