Swiss National Bank wants to enter the Forex market

The Swiss National Bank considers the opportunity to be active in the foreign currency exchange market in pursuit of its critical goal to stabilise prices. 

Under the condition of Swiss Franc depreciation, the Swiss National Bank is ready to sell foreign exchange. If the Swiss Franc appreciates strongly, the bank will buy foreign exchange.

This is a forced solution as the bank must cope with the extreme inflation rate of 3.5% last year. This is a relatively low inflation level compared to other countries across Europe and the world. However, it was much higher than the 0-2% rate, which the SNB considers normal for price stability. The forex market entrance is a step in the stability-oriented policy of the bank and the Swiss government.

Prices across various sectors of the economy rose by 3.3% in January, representing a year that inflation has remained above the SNB’s target range.

Market experts expect the Swiss National Bank to hike its rates again from the current level of 1% at its next meeting on March 23, with a probability of 85% for a 50-basis point increase.