The Swiss National Bank (SNB) reported foreign exchange interventions of approximately 100 million CHF in the fourth quarter, indicating a cautious approach. Last year, the total currency purchases reached around 1.2 billion CHF, a minor amount compared to 22.6 billion CHF in foreign currency sales within the same quarter.
The SNB has expressed its readiness to intervene more decisively but has also raised concerns over maintaining a manageable balance sheet. With the current EUR/CHF exchange rate higher than in February, the SNB appears more at ease with the franc’s position than it was previously.
Shift In SNB Strategy
We’re observing a shift in gear from the Swiss National Bank. Foreign currency purchases in Q4 were restrained—roughly 100 million CHF—pointing to a mildly reactive posture rather than an aggressive one. The full-year total hit 1.2 billion CHF, which, when you stack it up against the 22.6 billion in currency sales from the same quarter, speaks volumes about their restraint.
This suggests a few things. First, they’re not entirely stepping out of the arena, but they’re certainly keeping their powder dry. Second, a lighter hand in the foreign exchange market—particularly around the EUR/CHF level—suggests they’re not aiming to force the franc much lower. In fact, with the euro strengthening relative to February levels, they seem relatively content with where things are ticking over.
The comments regarding balance sheet management also hit home. Expanding foreign reserves requires domestic currency issuance, which in turn has implications for liquidity. By keeping interventions limited, they’re clearly trying to avoid adding too much weight to their own balance sheet, and by extension, not inject excess volatility into domestic markets.
This kind of cautious calibration from Jordan tells us that future action, if any, will be targeted and conditional. Not firepower for firepower’s sake, but used more as a backstop. He’s signalling a readiness to act, but in the same breath pushing responsibility onto broader monetary and currency conditions.
Implications For Market Expectations
For anyone watching short-term movements—particularly in rate-sensitive instruments—this may dampen expectations for sudden, large-scale market intervention in coming weeks. Of course, the door remains open, but it’s not swinging off its hinges. The franc may continue to find equilibrium near its present levels unless there’s an external catalyst that forces a response.
We’re factoring in a FX stability posture rather than an activist stance. That feeds through to our rate expectations, particularly given that there’s been no push to harden policy through currency suppression. Sensitivity analysis on options structures may need light recalibration, but there’s no current signal for wholesale revisions.
