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UPDATE 1-Switzerland's SNB still ready for forex intervention as U.S. drops manipulator tag

John Revill
·2 min read

(Adds detail, background, further SNB comment)

By John Revill

ZURICH, April 16 (Reuters) - The Swiss National Bank (SNB) said on Friday it remained ready to intervene in foreign exchange markets, after the U.S. Treasury Department dropped its currency manipulator label for the country even though it met criteria for the designation.

The Swiss central bank noted the U.S. Treasury Department did not use the term currency manipulator in a new report, adding its foreign exchange purchases were not intended to alter Swiss balance of payments or unfairly help the Swiss economy.

"The SNB's position is therefore clear: Switzerland does not engage in any currency manipulation," the SNB said.

In December, President Donald Trump's outgoing administration labeled Switzerland and Vietnam manipulators.

The Treasury Department, now under President Joe Biden, in its latest report said it will undertake "enhanced engagement" with both countries as well as Taiwan, on grounds they met the criteria under a 2015 U.S. currency manipulation law.

Still, a Treasury official said it was possible for countries like Switzerland to meet the tests under the 2015 law without being manipulators.

The report also concluded there was insufficient evidence under a separate 1988 law to conclude the three countries were manipulating exchange rates.

The SNB spent nearly 110 billion Swiss francs ($120 billion)on currency interventions in 2020, while the country ran a goods trade surplus of 28 billion Swiss francs with the United States, according to Swiss customs data.

While pledging to continue talks with Washington, the SNB said it would not change course from its ultra-expansive monetary policy, based on the world's lowest interest rates and currency interventions.

"The SNB's monetary policy approach...remains unchanged," the central bank said. "In view of the economic situation and the ongoing high value of the Swiss franc, the SNB remains ready to intervene in the foreign exchange market if necessary."

($1 = 0.9190 Swiss francs) (Reporting by John Revill, editing by John Miller)