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A day after the serious accusations from Washington, the president of the National Bank made clear what he thought of the American accusations: nothing at all. In the Bundesbern, the political left is appalled at US interference in domestic politics.
The president of the National Bank, Thomas Jordan, justifies the direction of the National Bank in a press conference held by telephone.
Photo: Anthony Anex (Keystone)
Neither in the official “monetary policy assessment” of the Swiss National Bank (SNB), nor in the speeches of the three members of the institute’s presidium, Thomas Jordan, Fritz Zurbrügg and Andrea Maechler, was the distribution of Switzerland as a currency manipulator by part of the United States on Tuesday. Currency interventions are one of the main reasons for the verdict of the US Treasury Department. After all, in its “assessment of the situation”, the central bank almost defiantly confirmed that “due to the highly valued Swiss franc” it was still ready “to intervene more in the currency market.”
“Neither Switzerland nor the SNB are currency manipulators, and our monetary policy is necessary and justified.”
In the journalists’ telephone question-and-answer session, however, no other issue carried the same weight as the American indictment. This was also due to the fact that the monetary policy assessment was not a surprise. The key interest rate remains at minus 0.75 percent, the outlook for the economies is grim for the moment, and inflation is extremely low: it should only rise to 0.2 percent in 2022. After all, the situation should improve next year. Both large and national banks face the challenge, but they are solidly on track. And all forecasts are associated with enormous uncertainties.
“No influence on our politics”
To the first question asked by a British journalist what was the message to the United States after the report, Jordan responded very decisively in English: “To be very clear: the report of the US Department of the Treasury has no influence on our policy. monetary. Neither Switzerland nor the SNB are currency manipulators and our monetary policy is necessary and justified. It corresponds to the mandate that the central bank received from the people and the parliament to maintain price stability. ”
The choice of words suggests that the president of the National Bank has already prepared for this question and has also addressed the Americans directly with his answer. Jordan has likely been keeping an eye on currency markets as well, because in the run-up to the US report there was speculation as to whether the National Bank could be restricted in future currency purchases by being condemned as a currency manipulator.
Several times at the press conference, Jordan spoke of American friends whom he had been talking to for a long time and to whom he explained his own politics. However, the US report raises questions about whether the Swiss have met with open ears. For example, it includes the demand that Switzerland focus on buying domestic bonds rather than buying foreign currency like other central banks.
In response to this demand, Jordan stated once again that this was not even possible because the private and government bond market in Switzerland was too small and not liquid enough for such purchases. Therefore, the National Bank only purchases foreign currency that fulfill the same economic function.
Bad communication
Aimed at journalists and probably Americans as well, the president of the National Bank also reiterated that the criteria that led to the conviction of the Americans were based on incorrect interpretations. Statistical peculiarities would make the Swiss surpluses seem exaggerated. Furthermore, the analysis does not include services for which the US shows a surplus compared to Switzerland.
In the report, the Americans also demand that the National Bank no longer oppose the trend of appreciation of the Swiss franc, which has been evident for a long time. This also reveals a lack of understanding on the part of the US At the press conference, Jordan explained that the evolution of the exchange rate since the financial crisis contradicts the image of Switzerland as a currency manipulator: since then, the price of the euro it has fallen from almost 1.70 francs to just above parity and the price of the dollar from about 1.25 francs to less than 90 cents. If the price of foreign currencies falls, this corresponds to an appreciation of the franc.
Furthermore, according to Jordan, Switzerland has one of the lowest inflation rates in the world. This shows that the National Bank was really willing to accept great recognition. But if the Swiss economy is at risk, you must intervene in the interests of your mandate.
When asked explicitly if communication with the Americans would not work so well after all, Jordan again emphasized how important dialogue with the United States was and that it was now again necessary for Switzerland to explain itself well. But then he also admitted that communication was not easy. When asked by a journalist if a Joe Biden government could lead to better understanding, Jordan simply replied that any government would seek a good understanding.
