Swiss National Bank Intervenes to Cap Franc Appreciation
Sight deposit data suggests the SNB has resumed FX intervention as the Swiss franc approaches parity with the euro, threatening export competitiveness.
James Harrington
Central Bank Correspondent
The Swiss National Bank appears to have resumed foreign exchange intervention to limit the strength of the Swiss franc, according to weekly sight deposit data published on Monday showing a CHF 3.2 billion increase — the largest weekly rise since March 2025.
The EUR/CHF pair dropped to 0.9280 last week, approaching the psychologically important parity level. The franc's safe-haven appeal has been amplified by geopolitical uncertainty and the ECB's easing cycle, which has weakened the euro.
SNB Chairman Martin Schlegel has previously stated that the central bank "remains willing to intervene in FX markets as necessary." The SNB's next monetary policy assessment is scheduled for March 20, where a rate cut from the current 1.00% is considered unlikely given already-low inflation at 0.4%.
Switzerland's export-heavy economy — particularly the watchmaking, pharmaceutical, and precision engineering sectors — is sensitive to franc strength. The KOF Economic Barometer fell to 97.2 in January from 99.1, suggesting the strong currency is beginning to weigh on economic sentiment.
The SNB's foreign currency reserves stood at CHF 695 billion at the end of Q4 2025, representing approximately 90% of Swiss GDP — one of the highest ratios globally.